Difference between eftpos, debit card. visa/MC debit cards?

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  blonky on 27/02/2017 - 14:51

  +5

  Someone will come soon and be able to clarify, but my understanding is:

  EFTPOS - pretty much just a bank transfer (Electronic Funds Transfer at Point Of Sale), so goes through instantly and no fees. Just like cash

  Debit - uses your bank balance, CHQ/SAV goes through like EFTPOS but CR or paywave/paypass uses the Visa/Mastercard system hence incurring fees (for the retailer) and time delays while it clears. Possibly the retailer is unable to differentiate between debit and credit cards when you tap or press CR. NB I've only used CR on a debit card while overseas, no idea if it works in Aus

  Credit - CR and paywave/paypass, using bank credit and as above

  Physical difference is debit cards will say DEBIT under the Visa/Mastercard logo

• 

  carwashhair on 27/02/2017 - 15:09

  +1

  Pretty much as blonky has put it, except to add that behind the mechanics described above is the eternal struggle between parties for interchange fees on your transaction.

  In one corner you have eftpos (owned from memory by the big 4 banks along with Coles and/or Woolworths) who would presumably be paying a very small interchange fee for the transaction to each other. In the other corner(s), you have the major credit card brands who have a complex interchange system, breaking down interchange fees into the 'class' of credit (i.e. platinum card, gold etc) and the type of transaction (paywave, chip, online etc etc).

  So, using a visa card (debit or credit) and pressing 'credit' directs the interchange thru the visa system. A bank-branded visa debit can often be used via 'savings', which would go thru the eftpos interchange system. Those gift card visa/mastercards and eftpos cards also go by the same rules (albeit more restrictive, as in you can only use credit for visa and savings for eftpos).

• 

  bluesky on 27/02/2017 - 19:31

  My understanding is: for debit or credit cards, if the merchant does not charge extra fees for credit card purchases (e.g. Woolworths/Coles), it may be beneficial to press CR, rather than SAV/CHQ (which goes through EFTPos). Or use Paywave/Paypass, which is basically CR.

  E.g. pressing Credit for a Visa Debit/Credit card:

  Visa's Zero Liability* Policy is our guarantee that you won't be held responsible for unauthorized charges made with your account or account information. You're protected if your Visa credit or debit card is lost, stolen or fraudulently used, online or offline.

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  retiredfeline on 27/02/2017 - 19:41

  EFTPOS and CC/DC systems evolved separately. IIRC EFTPOS evolved from Bankcard. EFTPOS merchant fees are lower, it was just a way of accessing money in your bank account.

  DC takes from your account so you cannot spend more than what you have in the account (except some accounts may have an overdraft, a safety buffer). The account might be savings or transaction (chequing account). Prepaid cards are effectively DCs because you can't draw more than what's in there. CCs on the other hand allow you to go into debt and suffer exorbitant interest if you fail to repay in time.

  Both CC and DC go through the "credit card system" and are subject to fees which is why some merchants add a surcharge while others absorb it.

  By "credit card system" I mean all the players: Visa, MC, Amex, etc. Despite being commercial rivals, they share payment infrastructure.

  The situation that often confuses is when you use a bank card (which might also be a DC or CC) through the EFTPOS system, there is no surcharge, but you may be surcharged if you swipe or tap, because it goes through the "credit card system". However you may get some fraud protection in the latter case. This is why sometimes you are advised to choose CREDIT rather than SAV/CHQ to get this protection.

  So just a rephrasing of what the previous posters wrote.