Debit cards vs EFTPOS

So you know what a debit card is - and you might be thinking that it sounds awfully similar to an EFTPOS card. Although they are very similar, there are some key differences between these two payment methods which might affect which one is the right piece of plastic for your wallet.

We’ve broken them down below...

What is EFTPOS?

First off, let’s start at the beginning: just what do we mean by EFTPOS?

The acronym stands for electronic funds transfer at point of sale, and it’s basically the electronic payment system that allows you to use your plastic at the checkout. You can have an EFTPOS card, but it can also refer to the terminal which you use in a shop to make a payment with your debit or credit card.

It’s the most common system used in Australia - so chances are, if you’re getting cash out or paying for your shopping with card, you’re using the EFTPOS system. However, the cards themselves, which we are focusing on in this guide are getting less and less common.

The difference between EFTPOS and debit cards

In some senses, a debit card and EFTPOS card are very similar - the most important similarity is that they both usually use funds that are available in your bank account, without drawing on any form of credit.

But to make an informed decision about which is the right option for your wallet, it’s probably more important to know what sets EFTPOS apart from a debit card. Here are some of the key differences:

  • EFTPOS is an Australian system. While you can use your MasterCard or Visa debit card overseas, you can only use an EFTPOS card in a select few places outside of Australia.
  • EFTPOS cards can’t be used for online purchases, but debit cards can. Rumour has it that EFTPOS are working on enabling their cards for online shopping, but with the cards quickly going out of fashion, only time will tell if it happens or not.
  • When you swipe your debit card in a shop, you might be given the option to choose credit (CR) as a payment method. With EFTPOS, you only have the option of either savings (SAV) or cheque (CHQ).
  • In most cases, banks don’t charge you for making purchases with Visa or MasterCard. Some do still charge you for EFTPOS purchases, or only give you a certain number of free transactions per month, but this is less common now than it once was.

MasterCard and Visa

One of the big differences between EFTPOS and debit cards, is that debit cards run on either the MasterCard or Visa payment system. This means that your debit card can be used anywhere these systems are accepted, including overseas, online, over the phone and in stores. It also means your transactions are protected by Visa or MasterCard safety measures.

It also gives you the ability to make contactless payments - and that technology is on the rise, quickly leaving EFTPOS cards behind.

EFTPOS, on the other hand, runs on its own system, which is generally limited to Australia. You usually can’t use it over the phone, online or overseas and it doesn’t come with a contactless option.

Although using other systems offers added security, the EFTPOS system is by no means unsafe. As long as you keep your PIN secure, review your bank statement regularly and alert your bank straight away if there’s anything fishy going on, your EFTPOS card should be safe to use.

The long and short of it is that EFTPOS is essentially a more basic version of a debit card.

Cheque, savings or credit?

Have you ever been standing at the counter, whipped out your plastic, and been stumped by the question, “cheque, savings or credit?” Don’t worry, we’ve all been there, and now, we’re here to clear up the confusion once and for all.

  • Savings - When you select savings at the checkout, that doesn’t mean the money will come out of your savings account. It’s actually coming out of your bank account, which is usually linked both to your debit card and your savings account, so you can transfer money as you need it. When you press savings, the money is transferred out of your account almost immediately through the EFTPOS system.
  • Cheque - Hitting cheque works almost the same as savings - the money comes out of your transaction account (or a chequing account if you have one set up) and is processed through the EFTPOS system. Also, if you want to get cash out at the checkout, remember that you’ll have to pick cheque or savings - cash out usually isn’t available with credit.
  • Credit - Pressing credit is a little different, in that it can only be processed through the MasterCard or Visa system, and not EFTPOS. The main reason to do so is you’ll have the added security of performing your transaction through the Visa or MasterCard system, which both come with zero liability cover, meaning you’ll be fully reimbursed for any fraudulent activities. Banks generally prefer you to press credit, because they make more money that way, while a retailer will probably prefer cheque or savings, because it saves them money. It can sometimes take a little while for the details of the transaction to be finalised when you press credit, which is why you might see pending transactions on your account.

The bottom line is that aside from the system the payment is processed through - EFTPOS vs MasterCard or Visa - there isn’t a huge difference, no matter which button you press.

Find a debit card

Debit cards offer more flexibility than an EFTPOS card, and these days, they’re a pretty standard addition to any financially savvy wallet. So find the best fit for you by heading over to our comparison page to compare debit cards side-by-side.

Compare today's top debit cards