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Australia is one of the leaders in the tap-and-go trend and there are plenty of ways for small businesses to accept credit card payments. You can use this guide to compare the different options available, including costs and other factors to consider that will help you choose a payment option that suits your business.
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 accept most credit cards and come in three main categories:
Depending on the vendor, you could be potentially charged a combination of the following fees:
Keep in mind that the specific fees charged do vary between companies and plans. For example, one EFTPOS provider may offer a fixed monthly contract with no set-up fees and an included number of transactions each month. If you processed more than the set number of transactions, additional fees would apply.
In comparison, another provider may charge a smaller monthly rental fee, along with a percentage fee for each transaction. With either option, the total monthly costs also vary depending on how many payments you process through the EFTPOS terminal. So 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.
In this scenario, let's say your business processes an average $20,000 worth of card transactions each month. Now, let's compare the costs of two different EFTPOS plans based on their monthly fees and transaction fees.
Fee type | Plan 1 | Plan 2 |
---|---|---|
Monthly fee | $180 | $50 |
Transaction fee | 0% for the first $15,000 of card transactions per month, then 2.5% per card transaction for the rest of the month | 1% per card transaction |
Total monthly cost based on $15,000 transaction value: | $305 | $250 |
Based on this scenario, Plan 2 is the cheapest option, with a saving of $55 per month compared to Plan 1. This is despite the fact that Plan 1 includes $15,000 of card transactions per month. For businesses with higher or lower monthly card transaction values, the results could be very different. So it is important to consider your own business details when you are trying to find the most affordable EFTPOS option.
You can use a mobile credit card reader to process payments through your smartphone or tablet. 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:
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.
You'll need to pay a fee for the mobile card reader or app. Most mobile credit card processing services charge a flat fee. The two most common models include:
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. You can see Finder's guide to accepting credit card payments online for more details.
The fees you'll pay will depend on the service you're using, but you may be charged set-up fees, account fees (usually charged monthly or yearly) and payment processing fees.
With so many methods of accepting credit card payments available, small businesses in Australia are spoiled for choice. Some payment processing options will be more suitable than others, so it is always good to start by considering the needs of your business. It is also important to do the maths and weigh up the extra costs against your business profits to decide if it’s worth the investment.
Picture: Getty
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