If you’ve been running a business in Australia for some time, you've likely heard the term "EFT." But as Australia shifts toward real-time banking and the phases out cheques, what counts as an EFT payment has evolved.
For most merchants today, EFT is central to how money moves through your business. This guide breaks down how electronic funds transfers work in Australia today and why choosing the right processing model for your payments can potentially save you thousands in fees.
EFT (Electronic Funds Transfer) is a term used to refer to any digital transfer of money from one bank account to another. Unlike a physical cash exchange or a paper cheque, an EFT relies on a secure network of financial institutions to approve and move data.
In Australia, EFT usually refers to one of three things:
Even though an EFT feels instant, it is actually a rapid relay that involves multiple stakeholders. In Australia, this process has been revolutionised by the New Payments Platform (NPP).
Built by the Reserve Bank of Australia, the NPP is an Australian infrastructure launched in 2018 that enables real-time, 24/7 bank transfers between accounts, replacing slow, traditional batch-based methods. It allows instant payments, supports PayID for simpler addressing, enables data-rich transactions, and includes features like Osko and PayTo for immediate fund transfers.
When a customer initiates an EFT, whether via an online bank transfer or a tap at your terminal
While legacy Direct Entry payments which are processed through the Bulk Electronic Clearing System (BECS) can take 1–3 business days to settle in batches, modern EFTs through the NPP allow for instant settlement, meaning the money is in your account before the customer has even left your store.
Customers now expect to be able to pay via their preferred payment method, and accepting only credit or debit cards isn't enough. To optimise your margins, you need to understand the different EFT types available to your business:
These days, there's no need to double-check Bank State Branch (BSB) and account numbers. PayID allows customers to pay your business using just your ABN or phone number. These are EFTs that happen in real-time, 24/7, and even on public holidays.
Traditional direct debits are great for recurring revenue, but can be slow and prone to dishonour fees if a customer has insufficient funds. PayTo is the evolution of this; it gives you instant approval or rejection on a recurring payment, drastically reducing failed transactions.
Apple Pay and Google Pay are digital wallets that use near field communication (NFC) technology to pay contactlessly. They rely on tokenisation — sending a one-time digital code instead of the actual card number — which makes them a notably secure way to pay compared to traditional card swipes or manual entry.
Many Australian businesses start with flat-rate providers because they seem simple. However, as your volume grows, this simplicity becomes a tax on your success.
Most flat-rate providers charge the same fee for a high-reward credit card as they do for a basic eftpos debit tap. Because debit EFTs are significantly cheaper for the processor to run, they pocket the difference.
By moving to an Interchange Plus or a more transparent EFT model, you keep the savings from low-cost Australian debit transactions. Instead of a one-size-fits-all fee, you pay the true cost of the "relay race" plus a small, fixed markup.
The best EFT setup for your business isn't just about the lowest fee today, it's about the fastest settlement and the most reliable support tomorrow. As Australia moves toward a cashless society, it's important to ensure that the payment terminal you choose helps your business to thrive in the long term as digital payments increase.
KPay Terminal Pro offers various features to help your business succeed:
With KPay Terminal Pro you can effectively meet your customer's needs for speed, versatility of payment methods, and ensure secure transactions — all with one device.
Register online to get KPay Terminal Pro or talk to our sales team to find out more today.
