EFT EFTPOS vs Debit blog header

New Zealand was an early adopter of the EFTPOS card, however as debit cards and alternative payment methods become more popular, it's important to understand the differences between EFTPOS and debit cards.

When a customer asks their bank for a payment card, the bank can offer them either an EFTPOS card, a debit card or a credit card. A credit card is a revolving line of credit while EFTPOS cards and debit cards are similar in that the money the customer is using when they use their card comes from their own bank account. The key differences between EFTPOS and debit cards are the functionality they offer and where and how the cards can be used. Keep reading to understand what this means for taking payments from debit cards vs EFTPOS cards.

Benefits for cardholders


Debit cards are much more versatile, which makes them more attractive for consumers. EFTPOS cards can only be used to pay at an EFTPOS terminal by swiping the magnetic stripe, whereas debit cards can:

  1. Be tapped to use 'PayWave'
  2. Connected to alternative payment methods like Apple Pay or Google Pay so that customers can make payments with their smartphone or smartwatch
  3. Used to make payments online
  4. Used wherever the scheme they are issued with is accepted, which means they can be used on more payment terminals overseas

Most people require a card to make payments online for necessities such as paying bills but don't necessarily want a credit card. Plus, as more consumers adapt to alternative payment methods, some cardholders are starting to rely on making payments with their phone or watch, and may not even carry their card around with them at all!


One objection some cardholders have to debit cards is that EFTPOS cards are more secure because they always require a PIN to complete transactions, they can’t be used for Paywave transactions, and they can’t be used for online transactions. This means if the card is stolen, it's useless unless the thief knows the PIN.

However, Debit cards are still considered secure because they have additional protections backed by the card issuer and card schemes as well as additional layers of security smarts.

Transaction fees for merchants

If the cardholder inserts or swipes their EFTPOS or debit card and chooses ‘Cheque’ or ‘Savings’, the transaction is free for you to process. But if the customer taps their contactless card or device, or swipes or inserts their scheme card and chooses ‘Credit’, the transaction will incur a merchant service fee.

This is because when a cardholder uses their EFTPOS card, or inserts their debit card and chooses 'Cheque' or 'Savings', the transaction is sent directly to the cardholder's bank to verify they have enough funds to complete the transaction. However, if a debit card is tapped, it is sent to the cardholder's bank to verify via the merchant acquirer and relevant card scheme. The card issuer charges the acquiring bank an interchange fee and this interchange cost is passed onto you as part of your merchant service fee. The card schemes and payment gateways also charge fees for processing the transaction, which are also included in your merchant service fee.

This means you are only charged to process scheme debit cards on your EFTPOS terminal if the transaction is contactless. Fees also apply if the transaction is a card-not-present transaction.

Depending on the set-up of your merchant services fee structure, the fee for processing a tapped debit card can be less than the fee for processing credit cards and the fee for processing a tapped credit card is cheaper compared to a swiped one!

One way you can mitigate the cost of merchant service fees is by applying a surcharge to scheme card transactions.


In New Zealand, it is legal for merchants to pass on the merchant service fee (or MSF) for accepting ‘scheme’ transactions, including payments made on Visa, Mastercard, UnionPay, American Express, Diners and JCB cards.

When you enable surcharging on your Eftpos NZ terminal, your terminal will automatically detect when the transaction is a ‘scheme’ transaction and apply a surcharge. Our new Android machines even allow for contactless transactions to be surcharged. Click here to read our tips for applying a credit card surcharge.


Digital wallets are the future, and you don’t want to be in a position where you can’t accept payments from a customer because they aren’t carrying a physical card around with them. To find out more about switching to one of our latest Android machines, click the button below.


This blog post was updated on 23 July 2021 to edit some inaccuracies included in the original text. Scheme debit cards are still issued by the bank, Visa and Mastercard don’t issue cards. Chargebacks are facilitated in the card scheme systems but are not processed by the schemes. Where someone fraudulently uses an Eftpos card, the card issuer will generally refund the cardholder and try to recover the funds from the fraudster. When a scheme debit card is processed it is not just sent to the scheme to verify, it is sent to the cardholder's bank via the merchant acquirer and the relevant card scheme. More detail was also added about the makeup of the merchant service fee.