In today’s world, we are surrounded by technology that makes our lives easier. One such example is EFTPOS (Electronic Funds Transfer at Point of Sale), which is a payment method that is the preferred form of payment for in-store shopping. Card payments facilitate the secure transfer of funds from one bank to another in return for goods and services. With cash becoming scarce, you may wonder whether obtaining and using a personal EFTPOS machine for private use would be beneficial.
Who uses EFTPOS terminals?
Accredited EFTPOS resellers such as Eftpos Now, sell or rent EFTPOS terminals to people in trade. This can also extend to charities, religious organisations and groups involved in the arts, including musicians. An EFTPOS transaction, although digital and lightning quick, is a complex collaboration between several parties. These invested parties are the merchant, the merchant bank, the customer or cardholder, the cardholder’s bank or credit card scheme, the payment network, and the acquiring bank. Each point of contact and conduit in this elaborate network must adhere to strict security measures to protect the finances, data, and privacy of everyone in the equation.
Due to the complexity of digital transactions and the risks involved, every party in the transaction is subject to scrutiny and obligations. The first step to EFTPOS terminal rental or ownership, is acquiring a merchant number either through a bank or by directly applying to one of the main network providers in New Zealand: Worldline or Verifone.
Herein lies the fundamental reason why a private individual could not carry a personal EFTPOS terminal in New Zealand: a private individual is not a merchant. A merchant in New Zealand would have their own business bank account or organisational bank account (i.e., a trust, club, or society). Failing this, a merchant number cannot be issued. (A merchant number is programmed into an EFTPOS terminal and links the transactions to a business bank account. For more information about merchant numbers, see our blog here).
This essential pre-requisite immediately precludes private individuals from EFTPOS rental or ownership. As a consumer or cardholder, this is reassuring as it means the handlers of EFTPOS terminals have had to prove their legitimacy and credit worthiness. There is still the potential for fraudsters to use EFTPOS machines to skim cardholder details or access your bank account information, but this is far less likely when the operator or merchant has been processed through the bank’s rigid channels.
Banks screen merchant number applicants and monitor and enforce transaction limits, access to MANPAN (card not present transactions) and the issuance of refund cards. The bank’s security around these functions not only helps prevent money laundering but holds businesses accountable for their financial practices.
Can a sole trader operate an EFTPOS Terminal?
A sole-trader business in New Zealand could acquire a merchant number as they would operate a business bank account. They are a business entity whose aim is to conduct business and they can therefore obtain an EFTPOS terminal. Many Eftpos Now clients such as taxi drivers and coffee cart operators are sole traders.
Short-term EFTPOS rentals
There are some occasions where a personal EFTPOS machine might be appropriate for an individual who is not a business owner but is hosting a special event or is entering a short-term C2C sale.
Individuals who are fundraising find that an EFTPOS terminal provides greater payment choices to potential donors and suits the instantaneous and often opportunistic nature of donation gathering. A person hosting a garage sale or an author staging a book launch might also decide that a personal EFTPOS machine is worthwhile.
You can see that the common thread where a private citizen might rent an EFTPOS terminal is when there is a legitimate purpose, or they are hosting a one-off event or fundraising exercise.
In the examples above, a merchant number is provided by Eftpos Now for a limited period. (Terms and conditions apply).
I’m in business, how do I obtain an EFTPOS terminal?
Eftpos Now specialises in both selling and renting EFTPOS terminals, POS, Kiosks, and portable POS, so we’ve got you covered where point of sale is concerned.
Entering into a long-term rental agreement can prove more cost effective than irregular one-off short-term rentals so it pays to see which option makes more sense in the long run. We can provide quotations for both short-term and long-term rentals, as well as purchase pricing, to help you determine what scenario best suits your budget and your business goals.
As outlined earlier, to operate a personal EFTPOS machine for a series of weeks and months, you would need both a business bank account (even as a sole trader) and a merchant number. Obtaining and maintaining a business bank account attracts monthly and transactional fees which are set and administered by the bank. A merchant number incurs a monthly network fee of $18.90 + GST (Worldline network) or $15.00 + GST (Verifone network). Merchant Services Fees are unique to you so you should familiarise yourself with the fee structure so that you can determine if a. maintaining an active merchant number is worthwhile and b. what transactional surcharges you may choose to on-charge to cardholders.
The overheads involved in operating an EFTPOS terminal are another facet of EFTPOS rental or ownership that makes EFTPOS terminals unsuitable for private individuals who are not in trade.
Conclusion
EFTPOS terminals are geared towards helping people in business to transact payments using cards affiliated with banks and the major card schemes. An EFTPOS terminal requires a merchant number which is linked to a business bank account. Therefore, a private individual would not be able to obtain this most essential requisite of EFTPOS terminal operation and ownership. Merchant services fees and network fees are aimed at businesses, and this further bars individuals from being able to operate a personal EFTPOS machine without legitimately being in trade. There are certain, one-off events where a private individual may need to rent an EFTPOS terminal and Eftpos Now can help in these cases.
Transferring funds between private individuals for personal reasons is best performed through internet banking.
If you require any further guidance around EFTPOS rental and ownership, give us a call on 0800 33 33 04.