What is the full form of EFTPOS?

Definition of EFTPOS

Electronic funds transfer at point of sale (EFTPOS) system was created in the 1980s. There were initially several distinct EFTPOS providers set up, but they were not connected to one another, which caused compatibility problems. As a result, it was initially not particularly well-liked, and stores were sluggish to adopt the concept.

The different U.S. systems were unified for greater interoperability as a result of regulations put into place in 2002, yet the EFTPOS business has experienced substantial development as a result. This made the system more widely used by encouraging additional users to utilize it.

The usage of cards is yet restricted to the borders of the individual nation because numerous nations continue to employ various interbank models. In recent years, MasterCard and Visa have created a debit card that can be used at foreign EFTPOS terminals in addition to several major credit cards that are widely accepted abroad.

How EFTPOS works?

An electronic funds transfer is an exchange of money electronically from one account to another, either within the same bank or between different banks or credit unions. It takes place without direct staff intervention thanks to computer-based technology.

EFTs are transfers that are initiated by a phone call, computer, electronic terminal, or magnetic tape with the intention of ordering, directing, or allowing a financial institution to credit or debit an account.

Today, this procedure has various different names. In the United States, it may be referred to as an e-check, a bank transfer in the UK, or a giro transfer in Europe. EFTs include bank deposits, ATM transfers, cashier direct debits, and immediate payments.

Advantages of using EFTPOS

• A transaction that was carried out using EFT is subject to the challenge − You have the right to request that your bank looks into any transactions that appear to be inaccurate or unlawful if you pay with an electronic funds transfer and are in dispute with a merchant. Although you have 60 days from the date of the bank statement to ask for assistance with something that seems off, this benefit may provide you with financial safeguards that protect you from potential theft. Be sure you thoroughly examine each statement you receive from a credit union or bank to be sure no illegal activities went through.

• If you don't have a debit or credit card, you can still make purchases − Even if they don't accept traditional checks, many establishments will consider an electronic check exchange as payment. Customers thus have the opportunity to purchase goods that they would not otherwise have the opportunity to do so if they don't have a credit or debit card. There is also no risk of debt with this approach because the funds are drawn directly from the associated bank account.

• The EFT technique is generally secure for receiving money − Receiving money via a wire transfer is generally secure. With this approach, payments are more guaranteed because a company will only send funds that are currently available. The cash is normally yours to keep after it arrives, though there may be some exceptions in certain circumstances

Additionally, after the money has been sent to you, it is challenging for the sender to get it back Before attempting to access funds, you must ensure that the transfer of funds is legitimate. To find out if the money was transferred, you need to contact the bank. Reversals of some digital payments are possible.

Security measures in EFTPOS systems

• Avoiding Money Transfer Fraud − Never raise the amount of a payment transaction to pay a cardholder's debt to an unidentified third party, such as a delivery company, and never send money or bank transfers to these companies. Fraudsters typically place greater value orders over the phone when using Funds Transfer Fraud to steal money from retailers. This frequently leads to money being sent to, say, an employee who is involved in fraud, and then a fraud chargeback is issued since the card that was used to make the payment was stolen.

• Don't test cards − By processing a large number of transactions through e- commerce merchant facilities using automated scripts, fraudsters check the accuracy of stolen card details. The fraudster receives an approve or deny decision each time the transaction is forwarded by the shopping Facility to the card issuer for authorization and is able to assess whether the card is still valid. Although other retailer categories can be targeted, utility companies and charitable organizations are where card testing is most prevalent.

Conclusion

The standard electronic fund transfer is connected directly to the bank account of the sender. Although transferring funds between checking and savings accounts is a trusted process, there are several flaws in this system that some customers may find unsettling when dealing with a retailer. Although completing the process doesn't require much disclosure of personal information, some people refuse to do so because a debit card adds an additional degree of security.

FAQs

Q1. What does the EFTPOS authorization process include?

Ans: The authorization process carried out by an EFTPOS device or eCommerce solution verifies that the card used in the means of a payment transaction has adequate funds to cover the transaction value and has not been banned by the company that issued the card.

Q2. What happens if an EFTPOS machine is unable to read a card?

Ans: Ask for another card from the cardholder if the EFTPOS machine is unable to read the card when it is tapped or dipped. Only follow the EFTPOS machine's instructions while processing a magnetic stripe transaction.

Q3. Does every business need EFTPOS?

Ans: Running a business teaches you that the client is supreme, always correct, and uncommon to carry cash. When your company has an EFTPOS facility, accepting payments will be less difficult because you may conduct business however your customers want. The payments industry is incredibly disjointed.