Last updated on March 29th, 2022

Debit cards are often compare to EFTPOS cards, and many debit cards have EFTPOS functionality.  However they are actually quite different in some respects.

EFTPOS stands for Electronic Funds Transfer at Point of Service and the money mostly comes from a bank current account.  Debit cards are cards that use the credit card payment system supplied by providers such as Mastercard and VISA but which are tied to a current account.  Both types of card use current account funds.  This is the most important similarity.

The first difference is that there is worldwide acceptance of debit cards.  EFTPOS cards are a home grown system that means that almost every EFTPOS accepting terminal is in Australia, although there are a few terminals in places where there are large number of Australian tourists, although these are being withdrawn.  Debit cards on the other hand use the international credit card payment network and so are accepted at millions of terminals worldwide.

Another difference is that EFTPOS cards are slowly losing ground in the number of merchants that accept them within Australia, as they start to lose popularity, although they are still widely accepted.  It is cheaper for a merchant to simply maintain a credit and debit card terminal.  Debit cards, meanwhile are becoming more popular.

Internet transactions and phone transactions are also possible with debit cards.  As debit cards use the credit card network, and as internet shopping cart programs are designed to accept credit cards as a default for payments then almost every site that accepts payment over the internet will be accepting debit cards.  EFTPOS at the moment is very restricted on transactions that are not face to face.

Another difference is that the payment for use of the debit card is by the shop or service provider, while with EFTPOS payment is paid for by the consumer in the same way that a cheque is cashed.  For many accounts there may be an unlimited or monthly quota of free transactions, an in effect these EFTPOS transactions would be free but on the more basic accounts each EFTPOS transaction may cost money.

Debit cards also offer greater protection against fraud.  This is because they are backed by international brands that have built up state of the art fraud detection and prevention systems.  There has been a growth in EFTPOS based fraud in the last few years as criminals have moved from credit cards to the relatively less sophisticated EFTPOS system.  If there is fraud most of the debit card providers will offer a zero liability policy that protects any card holder who lets the credit card company know in a timely manner of any unauthorised transactions.