Zero Cost EFTPOS: How Does It Work and What’s the Catch?

Discover how to pass on your cost of acceptance with Zeller. In Australia, businesses are legally entitled to charge customers a fee for processing an electronic transaction. This fee is called a surcharge. The purpose of this fee is to cover the costs associated with accepting the customer’s chosen payment method — yet some merchants choose to absorb this cost themselves. Zeller Terminal makes it simple to pass on your entire transaction fee, or a percentage of your transaction fee, with the toggle of a switch. When you surcharge the transaction fee in full, your business is getting zero cost EFTPOS . Keep reading to discover more about credit card surcharges, the legalities around passing on your cost of acceptance, and how to set your EFTPOS surcharge on Zeller Terminal. What is a surcharge? Different payment methods have varying costs and benefits to both businesses and their customers. A surcharge is an extra charge you can pass onto your customers who choose to pay with a credit or debit card, or smart device. Every time your business processes a cashless transaction with an EFTPOS terminal , you are charged a small fee to cover the checks and balances that must occur in order to safely move funds from a customer’s bank account into your own. Zeller makes it easy for you to pass that cost — either in its entirety or in part — onto your customers as a surcharge. Having the ability to set a custom surcharge means you can choose what suits your business, and your customers. Why businesses surcharge their customers The prices that merchants set for their goods and services incorporate the general costs of running the business — such as rent and electricity, among other things. Yet an important distinction between other business costs and the costs associated with transactions is that it is the customer that chooses the method of payment, which then determines the cost of the transaction. Cards are the most frequently used method of payment in Australia. As cash use continues to decline, the more electronic transactions your business processes. You will need to make fewer trips to the bank to deposit your takings, spend less time counting cash drawers, and benefit from the increased security that solutions such as Zeller Terminal offers. For more information about the shift away from cash and how this impacts your business, read our blog: Why Accepting Credit Cards is Critical for Business . It typically costs just a few cents to process an electronic transaction. However, many merchants look for ways to grow their business. For some businesses, passing on transaction fees via surcharging is a way to achieve this. The downside of surcharging Surcharging is relatively common in Australia — you’ve undoubtedly paid a surcharge as a consumer, whether at your local coffee shop, hairdresser, or high street store. Businesses of all shapes and sizes choose to pass on their cost of acceptance this way. Yet, for some customers, surcharging can be a turn-off that impacts their likelihood to return to your business and purchase again. It may even impact their perception of your business. Research from Finder shows the majority of Australians don’t believe they should be charged for choosing to pay with a card or smart device. Now that cash payments are becoming less and less common, the practice of charging an additional fee for card payments has even been called “ redundant ”. Should your business surcharge customers? In determining whether or not to utilise the Zeller surcharging functionality to recoup your cost of acceptance from customers, consider: the customer perception of surcharging. how common (or uncommon) surcharging is in your specific industry. whether your nearby competitors impose a surcharge. Surcharging is more commonly accepted in some industries than others. For example, 23% of Zeller merchants who run retail stores surcharge their customers, compared to just 2% of those who operate a beauty salon — which indicates that consumers are likely accustomed to paying a surcharge when tapping their card to pay for a new shirt, but less accustomed to paying a surcharge for a manicure. On the other hand, 12.7% of Zeller merchants who run a bar, restaurant, cafe, or other hospitality business surcharge customers. It’s also important to pay attention to what your competitors are doing — especially if you run a business that is reliant on a steady stream of local customers, such as a coffee shop. If locals know they can purchase their daily cup of coffee from a competitor across the street without paying a surcharge, you may risk losing their business. Ultimately, the decision of whether or not to surcharge is yours alone; no one knows your customers better than you. If you decide not to toggle on surcharging, either in full or in part, you could look for other ways to reduce your business expenses — such as by increasing the price of your products or services. Zeller Terminal makes it as simple as possible for those who wish to surcharge their customers to recoup their cost of acceptance, either in full or in part. Keep reading to discover how much you can surcharge, and how to set up your Zeller Terminal for surcharging. Surcharging rules in Australia The Competition and Consumer Amendment (Payment Surcharges) Act 2016 prohibits businesses from charging customers an “excessive” surcharge. However, there is no set rule regarding what is deemed an excessive charge. Legally, businesses are entitled to recoup the cost of accepting a customer’s method of payment — no more. The Reserve Bank of Australia outlines the costs that can be covered in a surcharge, including: Merchant service fees Terminal rental fees Costs to maintain a credit card terminal Other fees including switching fees, fraud-related chargeback fees, and more. How much can Zeller merchants surcharge? In setting your surcharge, it’s important to remember that Zeller Terminal is yours to own outright. That means businesses that use Zeller do not incur terminal rental fees. Transactions processed through Zeller Terminal, where the customer and their card are both present, typically cost 1.4% of the total transaction amount. Card-not-present transactions (whether over the phone or via post) typically cost 1.7%, to reflect the increased security measures required to verify the transaction. The maximum surcharge you can set is equal to your transaction fee. How to set your surcharge with Zeller Setting your custom surcharge takes just a few moments, and can be done via Zeller Dashboard or Zeller Terminal. Simply follow the steps below, and every transaction processed through Zeller Terminal will have a surcharge applied automatically. Setting your surcharge on Zeller Dashboard Surcharging functionality can be accessed via the Payments settings for each individual Zeller Terminal. Follow the below steps to set your surcharge on Zeller Dashboard for in-person payments. Expand the Payments menu and then click Sites . Select the Site you would like to manage. Click the Payments tab at the top of the screen. From here, you can either: Toggle on Surcharge my total fees , or Surcharge a percentage and enter a custom card surcharge that is no more than 1.4%, or Click Save to confirm your changes. Electing to pass on your total fees means you will recoup your costs for the full transaction amount, including any tips, every time. As MOTO transactions incur a higher fee, you need to toggle on surcharging for card-not-present payments separately. The maximum surcharge you can set for MOTO transactions is 1.7%. Setting your surcharge on Zeller Terminal Setting and updating your surcharge on Zeller Terminal is just as simple — however, you must be logged in as an Account Administrator. This is to protect your business from staff accidentally toggling surcharging on or off. For more information about surcharging with Zeller Terminal, visit the Support Centre . Providing Zeller merchants with the ability to pass on transaction fees in full or in part is just one way Zeller supports merchants to run their business the way that suits them.

Understanding how much accepting card payments really costs your business. Let's be real: the vast majority of your customers are paying on card these days. Yet when it comes to EFTPOS transaction fees and associated costs charged by banks, there’s been little evolution. The Reserve Bank of Australia’s Consumer Payments Survey  suggests that as of 2022, cash payments represented just 16 percent of in-person transactions, continuing the downward trend that has been underway for nearly two decades. Despite the transformation of the payments landscape on the side of the customer, banks have made minimal effort to assist business owners in adapting to this evolving environment. The lack of flexibility on the part of the big four has made fertile ground for tech-forward payment solutions such as Zeller that are heralding a revolution in business banking — without the banks. Read on for a transparent breakdown of what fees are involved with traditional EFTPOS plans, and how Zeller Terminal could be a smarter alternative for when your business needs to accept card payments. What is an EFTPOS transaction fee? An EFTPOS transaction fee refers to the amount a business is required to pay whenever it processes a card payment with an EFTPOS terminal. With most traditional providers, the fee you pay will vary depending on what type of card a customer uses and will usually be charged as a percentage of the transaction value. Transaction fees, however, are just half of the picture. There can be plenty of other costs associated with EFTPOS, and it pays to understand these before you get started. Kirsten and Malcolm are just some of the thousands of business owners who have cottoned on to the fact that, by virtue of the increased volume of card users, the banks’ EFTPOS transaction fees and costs have become extortionate, despite there being no material improvement in the service provided. Whether you’re planning for your new business or are shopping for a better deal, it’s important to understand the terminology, and how the fees are calculated so you don’t get caught out later. The four factors to consider when calculating your EFTPOS costs 1. Establishment and Setup Establishment fee When you get started with EFTPOS, banks typically charge a one-off establishment fee that covers the setting up of your payment terminal. It is usually charged per facility, so if you have more than one EFTPOS machine , you will be charged for each. At Zeller, the only upfront cost you'll incur is the price of the Terminal, aside from that, it’s free to get started. What’s more, when you sign up, you’ll immediately receive a free Zeller Transaction Account which you can choose to settle your funds into and use to keep track of your business cash flow. You can also order a free Zeller Debit Card to manage your business expenses. Monthly service/plan fee Depending on the bank and the pricing plan you establish, you will also likely have to pay a monthly service/plan fee. This fee is charged to cover the costs of providing your payment service. At Zeller there is no monthly service fee. POS integration fee If you would like to integrate your EFTPOS terminal to your point-of-sale, the banks will typically charge you a one-time fee. At Zeller, integrating your POS and your terminal is easy and you can do it yourself – for free. Of course, if you have any issues, our support team is always here to help, at no cost. 2. EFTPOS Transaction Fees Minimum merchant service fee If your total sales fall below a certain amount, banks will typically charge you a monthly fee per EFTPOS machine. At Zeller, we pride ourselves on our transparent pricing. There are no minimum sales requirements, so even if you don’t start using your Zeller Terminal straight away, you won’t be charged until you make your first sale. Interchange & scheme fees When a customer uses a credit or debit card to make a purchase, a number of fees are charged between your bank, your customer's bank and the payment card network (eg. Visa, Mastercard, or American Express). Without getting into the weeds, (you can learn how EFTPOS transactions work here ), the important thing to understand is that the transaction fee you pay your bank, is entirely dependent on the type of card your customer uses, and it could be anywhere between 0.2% and 3.5%. While Zeller also incurs the same variable interchange and scheme fees as the banks do, we simply charge you one fixed amount, no matter what card a customer uses. Every payment that is tapped, dipped or swiped on a Zeller Terminal (including payments using an American Express card) costs just 1.4%. If the payment is made over the phone, the transaction costs 1.7%. Not only does this make reading your merchant statement much less of a headache, but more importantly, it allows you to more precisely forecast your EFTPOS transaction fees. This means more accurate budgeting, and ultimately, healthier cash flow for your business. What’s more, having a simple flat fee makes it much easier to calculate a surcharge for zero-cost EFTPOS (more on this below). Return or refund fees When you need to refund your customer, the banks may charge a flat fee per refund transaction processed where a credit or debit card has been used. The fee is typically based on the volume of refunds processed. Zeller does not charge a return or refund fee. Chargeback fees A chargeback is a transaction reversal initiated by a cardholder through their bank or credit card issuer. It allows the cardholder to dispute a transaction and request a refund of the funds. If this happens, the bank will charge you a processing fee for investigating and resolving the dispute. With Zeller, you will not be charged if a customer successfully disputes a chargeback. 3. EFTPOS Hardware Monthly terminal fee When you sign up to EFTPOS with a bank, they provide you with the machines under a rental agreement, you do not own them outright. You will therefore be charged a monthly fee to cover the rent of your EFTPOS terminal(s). The fee varies depending on the type and quantity of terminals you use. Zeller EFTPOS Terminal costs $259 and is available to buy outright. Aside from the accessories and stationary mentioned below, there are no additional costs associated with the hardware. Equipment not returned/damaged fee Given that bank-issued EFTPOS terminals remain the property of the bank, if these are not returned or become damaged due to negligence or misuse, you will be charged a fee. Paper rolls and accessories For any additional accessories you request, such as terminal stands, EFTPOS cables or paper rolls; a cost is incurred. Note that many bank-provided EFTPOS machines do not have digital receipt capability, so it’s important to take the cost of paper rolls into consideration. The beauty of Zeller Terminal, is that you can choose to SMS or email customers their receipts — removing the need for printer paper, and further reducing your costs. 4. Surcharging In Australia, it is legal to pass the cost of your EFTPOS transaction fees onto your customer. This process of surcharging is referred to as 'zero-cost EFTPOS'. While it's gaining widespread popularity among business owners, it's important you understand how it works, because charging more than what you pay in transaction fees can get your business into trouble. With a bank-provided EFTPOS machine, surcharging requires the merchant to calculate their own surcharge rate. Legally, the rate needs to be set at the average acceptance cost of the lowest card system . For instance, your surcharge fee might need to be set at 1% — even if the bank charges you 2.6% to accept American Express cards. It’s important to take this seriously as the Australian Competition and Consumer Commission (ACCC) may take action against any merchant whose card surcharge exceeds its ‘cost of acceptance’ (that is, the amount it costs you to accept a payment from a particular type of card). Having a complicated fee schedule makes it very difficult to work out the correct rate to surcharge at, especially if you are running a new business with no history of EFTPOS transactions to base your decision off. Thanks to Zeller’s flat rate applied to all cards, surcharging is simple. Business owners have the flexibility to toggle surcharging on or off — as and when it suits their business — and to choose to pass on the entire EFTPOS transaction fee, or just a fraction. With surcharging enabled, your Zeller Terminal will automatically apply a surcharge to every transaction total, no calculation required. Read our blog to find out whether surcharging is right for your business . The way people are paying has evolved, so it’s time your EFTPOS process did too. When figuring out what EFTPOS terminal is right for your business, it’s important not to simplify the decision down to transaction fees alone. The bank charges associated with setting up the service, connecting your POS, renting the terminal and paying for additional fees for refunds or receipt rolls can end up costing you much more than you think in the long run. Additionally, complex transaction fees that vary depending on each customer’s card makes surcharging a complicated, and stressful, experience. The way people are paying has evolved, so it’s time your EFTPOS process did too. Join the thousands of Australian businesses simplifying their transactions and saving money with Zeller.