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How EFTPOS Works

In New Zealand we love to pay by EFTPOS. But what’s involved in accepting card payments in your business?

EFTPOS allows customers to pay you on the spot with a card and moves the money from your customer’s bank to your bank automatically.

Accepting card payments is easy, below are the steps involved in setting up EFTPOS for your business.

Starting an EFTPOS transaction

With everything set up to go, you can start a transaction by entering the purchase details into the terminal. Your customer then uses their card to make payment, either by swiping, inserting or (if you have contactless enabled) tapping.


Swipe the magnetic strip through the terminal and enter their PIN (personal identification number)


Insert their chip card into the terminal and enter their PIN

Tap or wave

Tap or wave their card (or other contactless payment device) over the terminal and make a contactless payment

Processing a transaction

Once your customer hits enter or successfully taps their card, you’ll see the “Processing” screen. In the next few seconds a lot is going to happen behind the scenes. In short though, your terminal packages up the data to send to the network which liaises between the acquiring bank (the bank processing the payment for you) and the issuer (the bank that issued the card) to decide if the transaction can be approved.

One final step – settlement

For the money to hit your account, your terminal needs to ‘settle’. This is like cashing up and depositing the earnings at the bank. Your terminal does this automatically once a day during your “settlement window”. Once you settle, your EFTPOS network will ensure all the money held for you by the acquiring bank moves to your merchant bank, who normally deposit it in your bank account the next business day.

And that’s it. That’s how a card payment works.

Next Steps

Never had EFTPOS before?

Learn how it works and is it right for your business.


What are the costs involved in accepting card payments in your business?

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