What is the difference between EFTPOS terminal providers and payment gateway providers?

In today’s digital-first world, businesses require efficient payment solutions to meet customer expectations and streamline operations. However, choosing the right payment solution often comes down to understanding the difference between EFTPOS terminal providers and payment gateway providers. While both serve as payment processing solutions, their functionalities, use cases, and benefits vary significantly. This article breaks down these two solutions to help you decide which option—or combination—is best for your business.

Understanding EFTPOS Terminals and Payment Gateways

What Is an EFTPOS Terminal?

An EFTPOS terminal (Electronic Funds Transfer at Point of Sale) is a physical device used to process in-person payments. These machines accept a variety of payment methods, including debit cards, credit cards, mobile wallets, and contactless options like Apple Pay and Google Pay.

Key Benefits of Using an EFTPOS Terminal:

• Real-Time Payment Processing: Payments are authorised and settled quickly, enhancing the checkout experience.
• Versatile Payment Methods: Accepts cards with chip, magnetic stripe, or contactless technology, along with mobile wallets.
• Seamless Integration with POS Systems: Modern terminals, such as Tyro EFTPOS solutions, integrate with point-of-sale systems for streamlined operations.
• Customer Experience: In-person payments are fast, secure, and intuitive, which can enhance customer satisfaction and loyalty.

Tyro offers advanced EFTPOS solutions like Tyro Pro and Tyro Go, which cater to businesses of all sizes with features like integration, mobile compatibility, and security.

What Is a Payment Gateway?

A payment gateway is an online service that facilitates transactions for e-commerce websites, apps, or other digital platforms. Acting as the virtual equivalent of an EFTPOS terminal, it securely authorises payments and ensures that funds are transferred from the customer to the merchant.

Benefits of Payment Gateways for E-Commerce Businesses:

• Online Payment Processing: Perfect for e-commerce stores, subscriptions, and digital services.
• Global Reach: Supports transactions from customers worldwide, including multi-currency options.
• Customisable Checkout Experiences: Businesses can integrate gateways into their websites for seamless online transactions.
• Fraud Prevention Tools: Many gateways include advanced fraud detection and prevention mechanisms.

If your business operates in-person and online, Tyro provides hybrid solutions combining EFTPOS functionality with digital payment gateway integration.

EFTPOS Terminals vs. Payment Gateways: Key Differences

While both EFTPOS terminals and payment gateways enable businesses to accept payments, the key differences lie in transaction types, use cases, and costs.

Transaction Types and Use Cases

In-Person Payments with EFTPOS Terminals

EFTPOS terminals are ideal for physical retail environments, restaurants, cafés, and service-based businesses. They support face-to-face transactions where customers are present to complete the payment on-site.

Online and E-Commerce Payments with Payment Gateways

Payment gateways cater to businesses that operate online, such as e-commerce stores, SaaS platforms, or businesses offering digital downloads. Gateways enable remote payments where physical customer interaction is unnecessary.

Security Features and Compliance

Data Encryption and Security in EFTPOS Terminals

Modern EFTPOS terminals, such as Tyro’s devices, include built-in encryption and compliance with PCI DSS standards, ensuring secure transactions that protect both merchants and customers.

Secure Online Transactions with Payment Gateways

Payment gateways offer advanced fraud prevention features, such as tokenisation and multi-factor authentication. These features help mitigate risks associated with online payments, where card-not-present transactions are more vulnerable to fraud.

Integration and Compatibility with Business Systems

Integrating EFTPOS Terminals with POS Systems

EFTPOS terminals integrate with POS systems to provide real-time synchronization of sales data, inventory management, and reporting. Tyro’s EFTPOS solutions ensure compatibility with major POS software, streamlining your operations.

Connecting Payment Gateways with E-Commerce Platforms

Payment gateways integrate with e-commerce platforms like Shopify, WooCommerce, or Magento. This ensures that your online store offers a seamless checkout experience, automated invoicing, and instant payment processing.

Cost and Fees

Typical Costs for EFTPOS Terminals

EFTPOS terminals usually involve upfront costs for hardware and ongoing fees, such as transaction fees and merchant service fees. Tyro Go and Tyro Pro offer flexibility to suit businesses of varying sizes.

Common Fees for Payment Gateways

Payment gateways charge per transaction and may include additional fees for cross-border payments, chargebacks, or currency conversions. Businesses should compare these costs when deciding on a provider.

Which Option Is Best for Your Business?

Choosing between an EFTPOS terminal and a payment gateway depends on your business model, customer preferences, and operational needs.

Factors to Consider in Choosing EFTPOS or a Payment Gateway:

• Business Type: Brick-and-mortar stores benefit from EFTPOS terminals, while e-commerce stores require payment gateways.
• Customer Preferences: If your customers prefer both in-person and online payment options, consider a hybrid solution.
• Budget: Compare the costs of implementing and maintaining each solution to align with your budget.
• Growth Goals: Businesses planning to expand into online sales may need both solutions for future scalability.

Tyro Solutions for Both In-Person and Online Payments

Tyro offers integrated solutions that cater to businesses needing EFTPOS terminals, online payment gateways, or a combination of both. For example:

• EFTPOS Terminals: Devices like Tyro Pro offer advanced features for face-to-face transactions.
• App-Based Solutions: Tap into digital innovation with Tyro BYO App for app-based payments.
• Online Integration: Tyro supports online payment gateway integration for businesses expanding into e-commerce.

Explore Tyro’s hybrid solutions, including Tap to Pay on iPhone and Tap to Pay on Android, which bridge the gap between in-person and online transactions.

Choosing the Right Payment Solution for Your Business

In today’s dynamic business landscape, offering multiple payment options is key to customer satisfaction and operational efficiency. By understanding the differences between EFTPOS terminals and payment gateways, you can make informed decisions that align with your business goals.

Whether you’re focused on face-to-face payments, online sales, or a combination of both, Tyro provides innovative payment solutions tailored to meet your needs. Explore Tyro’s range of EFTPOS solutions and app-based payment options, to take your business to the next level.