Debit Cards vs. EFTPOS - what’s the difference?

We tend to hear talk about debit cards and EFTPOS used interchangeably, but it’s important to know what each term actually means (and that you’ve got the right one in your wallet). 

To make sure you’re using the right card and to keep you sounding smart at the bank, let’s get to the nitty gritty: just what are the differences between debit and EFTPOS, and what is the right option for you?

A debit card is a basic form of payment card, generally linked to your everyday bank account. 

As opposed to a credit card, in which money is borrowed and can be subject to interest, a debit card uses your own money and won’t rack up those interest fees. 

Check out our guide to the difference between debit cards and credit cards for more information.

What exactly do we mean when we say EFTPOS?

The acronym EFTPOS stands for Electronic Funds Transfer at Point Of Sale, and it’s the electronic payment system that allows you to use your card at the checkout. 

You can have an EFTPOS card, but it can also refer to the terminal used in a shop to make a payment via debit, credit card, or mobile payment.

EFTPOS is the most common system used in Australia, so chances are if you’re getting cash out or paying for your shopping with a card, you’re using the EFTPOS system. EFTPOS cards themselves are getting less and less common.

In many ways, a debit card and EFTPOS card are similar. Both types of card usually use funds that are available in your bank account, without drawing on any form of credit. With the rise of tap and go, both types of cards can be used for contactless payments.

To make an informed decision about which is the right option for you, it’s 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, EFTPOS cards are mainly usable in Australia.

• EFTPOS cards can’t be used for online purchases, but debit cards can. The decline in the popularity of EFTPOS cards means it gets less and less likely they will be enabled for online shopping. This is one of the primary reasons you might pick debit over EFTPOS.

• 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, though this is becoming less and less common.

MasterCard and Visa

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

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.

Although using other systems offers additional 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 you notice any inconsistencies, your EFTPOS card should be safe.

Speaking simply, an EFTPOS card is a basic version of a debit card.

Ever been stumped by the terminal prompting you with the question “cheque, savings or credit?” 

Don’t worry, we’ve all been there. To clear up the confusion once and for all, here is the difference:

• 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 nominated bank account, which is usually linked both to your debit card and your savings account. 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.

• 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. These 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.

Remember, if you want to get cash out at the checkout, you’ll have to pick cheque or savings, as cash usually isn’t available with credit.

The bottom line: Aside from the system the payment is processed through – EFTPOS vs MasterCard or Visa – the end result is much the same. Just make sure you're being budget conscious!

Debit cards offer more flexibility than an EFTPOS card, and are a pretty standard addition to any wallet.

Find the best fit for you by comparing debit cards side-by-side.

Check out our full guide to the fees and features of debit cards. If you’re looking to make the switch to credit, find Mozo’s picks for the best credit cards.