Credit card processing for small businesses

There are plenty of ways for small businesses to accept credit card payments, including EFTPOS terminals, tap-and-go and online platforms. Use this guide to compare the different options available, including costs and other factors to help you choose a payment option that suits your business.

1. EFTPOS machines

EFTPOS (electronic funds transfer at point of sale) machines are secure and simple to use. Customers can swipe, insert or tap their cards against a reader to make payments. EFTPOS machines generally accept all domestic credit cards and come in 3 main categories:

• Countertop terminals. These are attached to your point-of-sale (POS) computer system via a cable. You can use them to process card payments from a fixed location in your store. Payments are processed in under 1.6 seconds and are compatible with Ethernet or 3G. Countertop machines are suitable if you process your payments from one location (such as a cafe or retail store, where payments are accepted at the counter).
• Mobile EFTPOS machines. These work in a similar way to countertop EFTPOS machines except they're portable. This type of EFTPOS machine could be beneficial for small businesses like delivery services, outdoor market stalls, cafes and restaurants where you can process payments at the customer's table.
• Integrated machines. This option is integrated with your POS system via the Internet to help simplify sales reporting and reconciliations. They are best suited for businesses processing a high volume of transactions, such as supermarkets.

Where do you get an EFTPOS machine?

You can get an EFTPOS device from the vendor, usually a bank. For instance, if you decide to use St.George Bank as your business bank, they may provide you with an EFTPOS terminal to facilitate card transactions.

You don't own this terminal. Instead, you use this terminal during the contract and return it if you choose to move to a different machine or device down the track.

Alternatively, you can pay for a standalone point of sale EFTPOS device that you own outright.

What are the costs of using an EFTPOS machine?

Depending on the vendor, you could be charged a combination of the following fees:

• Establishment fee. Some EFTPOS providers charge a one-off account establishment fee when you first sign up. This may be waived if you sign up for a set period, such as 2 years.
• Monthly plan. Many EFTPOS providers charge a monthly fee, typically $29 to $150 per month.
• Card transaction fees. Many EFTPOS vendors include a set volume of card transactions as part of their monthly plan costs. Others apply a separate percentage cost per transaction, equal to 0.9-1.8% of each card payment processed.
• Additional payment fees. Extra costs may apply if you want to accept payments through services such as UnionPay or over the phone. Some providers also apply a higher card transaction fee for American Express and Diners Club cards.
• Additional EFTPOS machines. EFTPOS plans typically include a single EFTPOS machine or a set number of machines before extra fees apply.
• Printer costs. For EFTPOS machines that have internal receipt printers, you'll need to pay for additional printer rolls and ink. Some banks may provide printer rolls as part of the contract.

The specific fees charged vary between companies and plans. For example, one EFTPOS provider may offer a fixed monthly contract of $180, with no set-up fees and 1,000 included transactions each month. If you process more than the set number of transactions, additional fees apply.

In comparison, another provider may charge a smaller monthly rental fee of $50, along with a percentage fee of 1% of each transaction.

With either option, the total monthly costs also vary depending on how many payments you process through the EFTPOS terminal and their value.

Make sure you consider the relevant charges and your average number of monthly credit card transactions before deciding which EFTPOS plan is right for you.

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Name	Product	Payment types	Machine type	Least-cost routing	Cost
Tyro		Visa, Mastercard, EFTPOS, American Express, JCB, UnionPay, AliPay, Diners Club	Countertop, Portable	Yes	From $29/month with no lock-in contracts	Featuring 24/7 local support, integration with existing POS systems and an available linked interest-earning transaction account.	Go to site More Info		loading Fetching your data...
Zeller		Visa, Mastercard, EFTPOS, American Express, JCB, Apple Pay, Google Pay	Countertop, Portable	No	$299 to own the terminal with no lock-in contract	Zeller payment terminals accept a large range of payment types including EFTPOS, debit, credit and contactless transactions and can be counter-top based or used as a portable terminal.	Go to site More Info		loading Fetching your data...
PayNuts Pay Nothing EFTPOS		Visa, Mastercard, EFTPOS, American Express, AliPay, Apple Pay, Google Pay	Countertop, Portable	Yes	N/A	PayNuts offers portable EFTPOS terminals with the option of paying zero transaction fees. You can also pay no terminal hire fees if the minimum monthly transaction volume is met.	Go to site More Info		loading Fetching your data...

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2. Mobile credit card readers

You can use a mobile credit card reader to process payments through your smartphone or tablet or to integrate into your POS system.

This type of mobile option usually involves either a card reader which you plug into your mobile device or an app you download and use for payments. Customers can then insert or tap their card against the card reader to make transactions.

Some popular mobile credit card readers in Australia include the following:

• Square
• Shopify
• CommBank Albert
• Tyro Mobile EFTPOS and Tyro Go

These products are compatible with iOS and Android devices, so you can manage them via an app. This option suits sole traders and smaller businesses that trade on the go. This includes vendors at a market, food trucks, plumbers and electricians.

Where do you get a mobile credit card reader?

These are standalone devices, not attached to any specific lenders or banks, so you'll need to purchase these separately from a retail outlet. You can expect to pay between $50 and $400, depending on the device.

What are the costs of using mobile credit card readers?

You'll pay a fee for the mobile card reader or app. Most mobile credit card processing services charge a flat fee. The following are the two most common methods of charging fees:

• A percentage of the sale.
• A percentage of the sale plus an additional fee per transaction.

3. Online credit card processing services

The main ways you can accept credit card payments online are merchant accounts, payment gateways (such as PayPal, Braintree and SecurePay), BPAY and direct debits.

Where do you get an online credit card processing service?

These are online platforms that you sign up to virtually. You may pay a monthly fee or a percentage per transaction.

See Finder's guide to accepting credit card payments online for more details.

What are the costs of setting up online credit card processing for a small business?

The fees you'll pay will depend on the service you're using, but you may be charged the following:

• Set-up fees
• Account fees (usually charged monthly or yearly)
• Payment processing fees

Depending on the volume of trade, you may be eligible for discounts. For instance, a small business that turns over $300,000 in card transactions per year may be eligible for cheaper percentages than a business that turns over $20,000 in transactions.

What to consider when choosing the right credit card payment processor

• Business type. The right type of credit card payment option for you will depend on your business. For example, a countertop or mobile EFTPOS machine may work for you if you're running a cafe, restaurant or clothing boutique. If you own a small business that often sets up shop at different markets, a mobile credit card reader might make more sense.
• Software integration. If you have existing POS software, you will need to find out whether the processing service will integrate with your current software. On the other hand, it may be time to migrate to a newer system. When doing your research, look out for EFTPOS, smartphone or tablet processing devices that offer the most comprehensive solutions, such as accounting or sales reporting features. This can help streamline your other business costs.
• Card acceptance. Most options accept all major cards, but it's important to check before you decide. You should also consider if the service will charge different fees depending on the type of card being processed (for example Visa, Mastercard or American Express).
• Revenue. The value of the machine should offset the cost of setting up a card payment service and any ongoing processing fees.
• Surcharges. It is common for businesses to pass on the cost of processing to the customer by applying a surcharge if they pay with a card. If you choose to do this, make sure you have clear signage to inform customers.