At First glance a choosing a “fee-free” EFTPOS machine can have its downsides as well as upsides. This is true with all eftpos suppliers, not just some.

Understanding the Costs:

  • Payment processing fees can be avoided by adding a surcharge to card transactions, which customers pay on top of the items purchased.
  • In many countries, card transactions are simply a cost of doing business. In Australia, surcharging is legal and common, so consumers are often used to seeing a charge for using a debit or credit card.

The Key Question:

Should your business absorb the cost of transactions, or should your customers?

Surcharging: Pros and Cons:

Pros:

  • No transaction fees for the merchant.
  • Predictable costs, especially for businesses dealing with varying transaction fees based on card type.
  • Offers an alternative to businesses that might not otherwise be able to afford an EFTPOS terminal.

Cons:

  • Customers may dislike it. Surcharges can feel unfair and inconvenient, especially for those who don’t carry cash.
  • Risk of losing sales from customers unwilling or unable to pay the surcharge.
  • Requires clear communication and compliance with legal requirements regarding surcharge transparency and fairness.
  • The real fees are set at the highest cost. Normally this is 1.65% per transaction.

Legal Obligations:

  • Merchants cannot charge more than the actual transaction cost.
  • Surcharges can be a variable or fixed rate, but specific rules apply.
  • Businesses cannot average costs across card types and must charge the lowest applicable fee.

Types of Surcharge Contracts:

  • EFTPOS terminals with customizable surcharge settings, allowing you to switch it on/off or for specific customers/periods.
  • Auto-calculating terminals that handle surcharges automatically and ensure legal compliance.
  • Fee-free plans with conditions, like Smartpay’s Zero Cost EFTPOS, which eliminates transaction and rental fees for high-volume businesses but adds their own commission to surcharges.

Ultimately, the decision of whether to use zero-fee EFTPOS with surcharging depends on your specific business context. Consider your customers’ preferences, sales volume, risk tolerance, and legal requirements before making a choice.

Remember, even “fee-free” options come with costs, either directly or indirectly. Compare different eftpos suppliers and choose the one that best aligns with your needs and budget.

At Payee we offer arrange of surcharge options ,which include no cost eftpos to partial absorbing the fees associated with eftpos transactions. 

Please note: This information is based on Australian regulations and may not apply to other countries. Always consult relevant legal and financial professionals for specific advice regarding your business and location.