Friday, 1 August 2014

Is there a minimum for EFTPOS here?

I don’t know about you, but I am getting really tired of the ‘minimum charge’ to use my credit or debit card as a form of payment at all my favourite places. And one day I really got down to thinking… “There’s no way the fees to use EFTPOS require vendors to charge upwards of $10.00AUD per transaction.” EFTPOS stands for Electronic Funds Transfer at Point of Sale, and I suspect it is being used as a more important tool for businesses then merely a new payment method channel.

There has to be some marketing or business objective being fulfilled by creating a minimum charge for transactions. I think it is as simple as businesses trying to make more money per transaction by requiring you to make add-ons in order to get what you came for. Without even digging deep or asking around, it is pretty common knowledge that most people would prefer to carry their plastic now instead of trying to find an ATM to withdraw cash – but are we overspending because of this new habit?

Lucky for us customers, certain banks like Commonwealth Bank explicitly state in contracts with their EFTPOS terminal renters that they are not allowed to charge a minimum payment. However, even if other banks don’t have the same clause in their contracts, the terminals cost around $60.00AUD per month to operate, which isn’t that much, even for small businesses, and could further increase their sales by offering the option of paying electronically.

Below is another example of electronic payments that may be taking place more frequently in the future, provided by a company called Square. This little iPhone or iPad device is a one time purchase with a small transaction fee that may make secure electronic payments more accessible to all vendors. This company uses offline transactions to process payments and later downloads to a server for record.

Even with a few new options on the market, the next time I am faced with a minimum transaction rate, I will probably take my business elsewhere at risk of certain vendors just trying to make money off add-ons.

Christine Drpich
Current student in the Master of Marketing program at the University of Sydney Business School

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