The cost of accepting EFTPOS in New Zealand varies depending on the device you use, how many devices you have, which network you connect to, and if you accept credit cards. All up, you can expect to pay from around $40 + GST per month up to as much as $100 + GST or more. This doesn’t include the cost of communications, for example your broadband internet connection, your POS system or value added solutions like credit card surcharging or terminal insurance. In this post, we break down the costs to businesses associated with a basic payment solution.
We Kiwis love our EFTPOS. According to a survey on cash use by the Reserve Bank of New Zealand, more than 80% of New Zealanders use electronic bank cards as their main way of paying for everyday things. Our loyalty to our EFTPOS cards means that if you're starting a brick and mortar business here, an EFTPOS machine is a must.
But as the old adage goes, you need to spend money to make money.
To accept EFTPOS payments in New Zealand you will need:
- to lease or purchase an EFTPOS machine;
- connect your EFTPOS machine to a payment network, and;
- arrange a merchant facility with a bank.
So exactly how much does all of this cost? First up, let's look at how much it costs for the device itself.
How much do EFTPOS machines cost?
If you purchase your EFTPOS terminal you can expect to pay a one-off purchase price of around $1000 - $1900 + GST, per terminal. If you choose to lease your EFTPOS terminal, you'll pay a subscription fee per EFTPOS terminal, per month - depending on the level of support you need, your terminal model (fixed vs. mobile) and the contract length you choose. The key benefit to leasing your terminal is that maintaining payment compliance and related responsibilities is included in your leasing agreement.
An alternative to an EFTPOS machine is a small card reader known as a ‘mPOS’ device. mPOS devices are often referred to as ‘mobile EFTPOS’ by merchants because the devices are typically paired with a smartphone or tablet. mPOS devices are available on subscription from your merchant bank.
How much do ‘mobile EFTPOS’ machines cost?
Mobile EFTPOS, or 'mPOS' devices, cost around $23 - $40 + GST per card reader, per month. If the device needs a smartphone or tablet, you'll need to supply this yourself and some banks also charge a set-up fee starting from $49 + GST, up to $99 + GST. In addition, accepting credit cards on mPOS devices is mandatory which means you will incur Merchant Service Fees whereas accepting credit cards is optional on EFTPOS terminals.
mPOS devices are perfect for 'micro-merchants' who process a low volume of transactions, while businesses with a medium to high volume of transactions are better suited to an EFTPOS machine, because:
- Handing an mPOS device back-and-forth can become cumbersome if you process a large volume of transactions.
- The devices run on battery power, so you need to make sure the device is charged, or you have a charging facility with you whenever you are trading.
- mPOS devices don't offer the same range of functionality that EFTPOS machines offer, for example:
- Receipt printing
- MOTO (Card-not-present) transactions
- Credit card surcharging
- Offline transactions are only available on some devices
- POS integration is only available on some devices
- mPOS devices can’t accept all card types
The next key component for accepting EFTPOS is connection to a payment network.
How much does it cost to connect to a payment network?
There are two payment networks to choose from in New Zealand: The Verifone Network and the Paymark network. We’re the only terminal provider with our very own network - the Verifone network.
Both networks charge a monthly fee per terminal, per month. Paymark charge an ‘admin fee’ of $14.00 + GST and the Verifone Network charges a network fee of $13.50 + GST.
A key benefit of choosing Eftpos NZ as your terminal provider is that your terminal and network services can be bundled, which means one contract and one monthly payment for both your terminal subscription and your Verifone network and just one number to call for technical support.
Connecting to both networks is free over a standard broadband connection. If you connect to either network using a dial-up connection you will pay a dial-up fee of $9.95 + GST per terminal, per month. If your terminal connects using 3G, it will be provided with a mobile data SIM. The cost of the SIM and mobile data usage will either be included in your rental price, or you may incur a ‘SIM’ fee of around $13.00 + GST per mobile terminal, per month. mPOS devices transact by connecting to mobile data on the smart device they are paired with.
If your EFTPOS terminal is set-up for WiFi, you may be able to hotspot your device to your mobile phone, but we don’t recommend this connection method. Compatibility between the phone and terminal can depend on your phone model, OS version and even your Telco provider, and the connection is often not reliable enough for processing transactions.
How much does it cost to accept credit cards?
The last thing you need to accept EFTPOS transactions in New Zealand is a merchant facility with a 'merchant acquiring bank'. Your bank oversees the transfer of funds from your customers’ bank accounts to your merchant account and they can also provide you with a facility for accepting credit cards.
When your customers use an EFTPOS debit card, the transaction is free for you to process. If you choose to accept credit cards however, you will incur a 'merchant service fee' (MSF) charged monthly and payable to your merchant acquiring bank. Contactless 'PayWave' debit cards also incur merchant service fees.
Your Merchant Service Fee is made up of Interchange Fees charged by the cardholder’s bank (known as the card ‘Issuer’) and fees charged for the provision of card payment services by the card schemes, the payment networks and your bank.
Most of your MSF is made up of Interchange Fees. These are fees charged by the cardholder’s bank to help cover the cost of reward schemes and fraud protection, as well as costs incurred by your bank to process the transaction. The fee is set by the credit card schemes and is influenced by a number of factors including the type of transaction (e.g. card-present vs. MOTO), the card type (contactless vs chip and PIN), and even your industry. Interchange fees can be charged as a set dollar amount or as a percentage of the transaction value. There are generally three different pricing structures for MSFs:
- Fixed - You pay the same MSF rate each month.
- Variable - Your MSF will vary month-to-month depending on transaction value, average transaction size and the cards you process since cards issued overseas incur higher transaction fees.
- Interchange Plus - Your MSF is made up of two separate rates - the actual interchange costs for each type of Visa and Mastercard transaction, plus a separate 'acquiring' cost.
mPOS merchant service fees
The MSF for mPOS devices is an example of a fixed MSF. The rates differ from bank to bank, but if you use a mPOS device, you can expect to pay between 2.6% and 2.9% of the value of your Visa and Mastercard credit and international card transactions. Some banks have lower rates for UnionPay and contactless debit card transactions.
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Wondering how much your EFTPOS solution is going to cost you? Need advice about which solution is best suited for your business? Our EFTPOS experts can help.