EFTPOS

eftpos

Transitioning your business to the NBN can cause your EFTPOS system to stop working. For some businesses, particularly retail, EFTPOS is one the most important tools they have for enabling sales. When the EFTPOS stops working, many of their clients just walk out of the door and go to another business, resulting in obvious lost sales.

Unlike an Alarm or Fax machine not working (or even the phone), EFTPOS failures often results in instantaneous loss of business. It is important that businesses carefully consider how the switchover will affect them and in particular move their EFTPOS first – so that it can be tested and if necessary fall back to the telephone line until the new solution is working.

Broadly speaking EFTPOS transition solutions fall into three main areas: data-only line, mobile and broadband.

Data-only line

This is probably the simplest short-term approach. Telstra (and only Telstra) can provide a “data-only line”, which is actually a type of ISDN line. While it is capable of carry normal voice calls, you’re not supposed to use it for that. It looks for all intents and purposes like a regular telephone line, though being an ISDN line is not affected by the switchoff.

The great advantage of this approach is that you just plug your existing EFTPOS terminal into it – no need to even talk to your merchant provider.

The biggest downside is the extra cost. Telstra charge a monthly rental for this line of around $46 per month. There may also be installation fees if you don’t want to sign a long term contract. The other big issue is that it is just a work-around for the switchoff. It too will eventually be disconnected (though no date has yet been announced by Telstra or NBNCo).

Many smaller businesses share their EFTPOS line with their fax and alarm system (some even share with their main phone line). Only one of these devices can be used at a time. This solution does not fix this problem (unlike the other solutions).

Mobile

This method has been around for several years – just send all the transactions over the mobile network. The EFTPOS terminal will have a SIM card in it, just like a mobile phone, and will communicate with the merchant facility over the mobile network. As far as I can tell every merchant provider has some sort of mobile offering.

The biggest advantage of this approach is that you end up with a totally wireless terminal – you can take it wherever you do business (even remote from your premises e.g. trade shows) and it is easier to hand the terminal over to your client when needing them to enter their pin (no wires attached).

There are however several downsides:

  1. Coverage: Most terminals use the older GPRS network (either Telstra or Optus), which has significantly poorer coverage outside the larger towns. Deloraine in particular has very poor GPRS coverage. There are some newer terminals using the 3G network from some merchant providers, however these are not widespread. If your coverage is poor the transactions will be unreliable and slow.
  2. Performance: Some businesses report that processing transactions with the mobile network takes considerably longer. If you are a high volume user (e.g. a cafe), this can be problem.
  3. Some merchant providers change extra for the use of the mobile network. Either by increasing the monthly rental or increasing the transaction fee (or both). However you need to remember that you may be saving the monthly expense of having a dedicated telephone line.

Broadband (IP)

This appears to be the best long term solution for EFTPOS in a post copper world. It uses your internet connection to transmit the payment details to the merchant facility. Most (if not all) the banks provide a broadband solution using the external company PC-EFTPOS. This is a sophisticated point-of-sale system that requires significant investment in IT systems. This is likely to be completely over-the-top for a small retailer. Most small retailers just need a simple, standalone EFTPOS terminal that goes over the broadband network instead of the current telephone network.

The biggest advantage of the broadband approach is that there is very unlikely to be any change to your monthly EFTPOS rental or transaction fees (actually it ought to be cheaper – it certainly saves the provider on their costs). It is also likely to process the transactions the quickest (there is no time delay while the terminal connects to the merchant provider – it is always “on”).

One provider, Tyro, also offer a standalone wifi terminal. This has all the advantages of the broadband approach, but is also mobile (within the wifi range of your premises). This makes it easier to hand the terminal to clients and avoids having to run cables from your front counter to the back office where your router lives.

The downsides to this approach are:

  1. It is relatively new and some merchant providers are being rather slow to offer the solution – except Tyro, see below
  2. It is reliant on your internet connection, while the NBN is generally much more reliable than the older ADSL internet, mainly due to faults in the premises equipment (routers etc) or in the back-end network of the internet provider, it still generally isn’t as reliable as the copper phone line.

Making the transition

You may have to consider changing your merchant provider if the one you currently use does not provide a suitable solution for you. For example for Deloraine, the mobile GPRS network is not an option – the coverage is just too poor. In my experience if the provider is unable to provide a service, they are willing to set aside any contracts you may have entered into and/or waive any termination fees.

Merchant support for different solutions

I have contacted some of the merchant providers to find out what solutions they offer:

BWA

Most of the terminals I have seen from them are the Vx570 which already does broadband communication. I have verified with them that transitioning is as simple as unplugging the phone and plugging in an ethernet cable from your router.

Bendigo Bank

Bendigo Bank are actively working on a solution for broadband and 3G (they already have GPRS). They expect a new terminal that will do both to be available by the end of January 2014. They already have a terminal that does broadband, but it doesn’t seem to be in widespread use.

Westpac

They have a mobile solution, but it is only GPRS. They have no standalone broadband terminal. Their only solution is tied to PC-EFTPOS which will require significant investment. They have been willing to cancel a 3 year contract of a client in Deloraine, but still wanted to charge a $100 “terminal collection fee”.

ANZ

They have a mobile solution, but it is only GPRS. Indeed most of their terminals already provide a mobile backup. However by default it uses the Optus GPRS network, which has significantly poorer coverage. It can be changed to a Telstra GPRS SIM on request. They are willing to not charge extra for using the mobile network if it is the only solution available. They are also willing to waive all termination fees on request. They do not have a standalone broadband terminal (only PC-EFTPOS), though they are working on one (no date given). My contact advised clients to call 1800 039 025 opt 2, to discuss.

Commonwealth Bank

They have a mobile solution based on Telstra’s 3G network, so this does provide the best coverage of all, however they do charge $34.50 per month for this terminal (more than the regular phone one). They also have a standalone broadband based terminal which is plugged into your router using an ethernet cable – there is no extra charge for this. For most clients it is as simple as calling them up and asking for a new terminal. The number to call is 1800 230 177

National Australia Bank

NAB offer a Telstra GPRS mobile option, 3G is being worked on. They do not charge any extra on the monthly rental for the mobile terminal. However they have no broadband offering at all.

Tyro

Tyro are a new entrant into the EFTPOS market. Like any new entrant they have been performing a lot of innovation. In particular they offer services that no other merchant provider do. The thing that caught my eye is that that they not only do broadband terminals, but they also work over wifi. This is something I have been asked about repeatedly. I highly recommend you check these guys out: tyro.com

St George Bank

St George currently only offer a Telstra GPRS based alternative to the telephone line system. There is typically an increase in the monthly terminal rental of around $5.50 and there may be a change to the transaction rates. They say that there is a Telstra 3G terminal coming, but estimated this to be 3 to 6 months away. It is unknown if there will be an IP based terminal.

Suncorp

I have not verified this information by speaking to them, however from their website the terminal they use offers both mobile (GPRS) and broadband (IP).

HICAPS

HICAPS have a 3G terminal that will process regular EFTPOS payments and Medicare refunds. However they are still unable to process private health fund payments via the 3G terminal. This leaves medical providers with a significant problem – they seem to have no workaround on this. They are working on the issue, however their current approach is to attempt to get the existing PSTN terminals to work over the NBN – which is likely doomed to fail. See HICAPS drops the NBN Ball

 

Mobile Mobile
Extra
Charge
Standalone
Broadband
Solution
Wifi
Available
BWA GPRS ? Yes No
Bendigo GPRS ? Yes No
WestPac GPRS ? No No
ANZ GPRS No No No
CBA 3G Yes Yes No
NAB GPRS No No No
StGeorge GPRS Yes No No
Tyro 3G No Yes Yes
Suncorp GPRS ? Yes No
HICAPS 3G ? No No
Summary
Article Name
EFTPOS Transition
Description
Transitioning your EFTPOS terminal to the NBN is one of the more critical (business impacting) aspects of the whole transition. Different merchant providers offer different capabilities, it pays to consider your options and if necessary change provider.
Author

3 comments

  1. Jessica says:

    Hi Damien

    Thanks for including Tyro in your breakdown. Just wanted to let you know there is no charge for mobile and the terminals use 3G. Cheers! Jessica

    • Damian Ivereigh says:

      No problem – I’ll make sure that info is reflected in the page.

      Damian

  2. Tim says:

    NAB has been rolling out 3G terminals (VX680 3G) for mobile customers for ages now (like 12 months or so). This is the default option for both new merchants and replacements for failed terminals.

    CBA’s Albert Android tablet terminal has WiFi support. As far as I’m aware, this is their only WiFi terminal. But CBA seems to have one of the biggest ranges of solutions, so CBA merchants should simply tell the bank what connectivity options they have available to organise a suitable terminal.