EFTPOS 101

Everything you need to know about eftpos!

The history of eftpos

The Bank of New Zealand first introduced eftpos to New Zealand in 1985 through a trial period with petrol stations. In 1989 the eftpos system was officially launched and two providers owned by the major banks now run the system. (More information below) During July 2006 the five billionth eftpos payment transacted through the Paymark eftpos network since the electronic form of payment was first introduced in 1989. 

First of all, let’s start off with explaining what EFTPOS stands for:

E – Electronic

F – Funds

T – Transfer

At

P – Point

O – Of

S - Sale

Secondly, it is important to know what parties are involved:

Ø  The Merchant

Ø  The Acquiring Bank/ Merchant Bank

Ø  The EFTPOS Network

Ø  The terminal or hardware supplier

The Merchant:

This is YOU the business owner

The Acquiring Bank/ Merchant Bank

They provide merchant facilities for businesses wanting to accept eftpos and credit cards as a form of payment for their business. These banks include:

Ø  Westpac

Ø  BNZ

Ø  ASB

Ø  National

Ø  ANZ

In order to obtain a merchant facility from one of the above banks a business is required to complete an application form. Once the application has been approved the bank will issue the business with a unique merchant ID. This ID is configured to the terminal, which transfers all the transactions into the merchants’ nominated bank account.

If the business just wants to accept debit only as a form of payment there is no charge from the bank. However if the business is wanting to also accept credit cards such as Visa or Mastercard the bank will charge a merchant service fee (MSF) which is a percentage of the businesses monthly credit card revenue with a minimum monthly fee of $20.00.

Note: If a business would like to accept Amex or Diners then this would need to be arranged with those companies directly.

The eftpos Network

This is the processing house for EFTPOS transactions, basically a middleman between the merchant’s bank and their customer’s bank. There are currently two networks in New Zealand that process EFTPOS:

Ø  Paymark

Ø  ANZ

Depending who the merchant has their main banking with will generally determine which bank they will use for the merchant facilities. The following is a diagram that shows the relevant network that each acquiring bank connects with.

The Terminal or Hardware Supplier:

That’s us; we are New Zealand’s preferred eftpos supplier with over ten years of leasing experience in the eftpos and telecommunications industry.  You can check out the latest terminals here or our latest offers here.

EMV and 3DES

EMV (Europay, Mastercard and Visa) and Triple DES (Data Encryption Standard) are global electronic payment security standards that all eftpos terminals in New Zealand must comply with. EMV refers to security chips on credit cards and Triple DES refers to PIN number encryption.

All terminals currently connected to the Paymark network have one of two software versions to support EMV and Triple DES, 5.2 and 6. All new eftpos merchants must have a Version 6 terminal to connect to the network.

Merchants that currently have a terminal supporting 5.2 software will no longer be able to connect to the Network from June 2014.