You've seen the ads. "Free eftpos machine." "Zero-cost eftpos." "No fees for merchants." It sounds brilliant — a terminal on your counter without paying a cent. But if it's free for you, who's actually footing the bill?
The answer isn't complicated, but it's important to understand before you sign up. Because "free" doesn't always mean what you think it means, and the wrong setup can cost your business in ways you hadn't considered.
How "Free Eftpos" Actually Works
The most common model behind free eftpos in Australia is surcharging. Here's the basic idea: instead of the business paying transaction fees to the provider, those fees are passed on to the customer as a surcharge at the point of sale.
So when a customer taps their card and pays $50, they might see a surcharge of, say, 1–2% added to their total. The customer pays $50.50 or $51, and the provider takes their fee from that surcharge. The business receives the full $50.
From the business's perspective, it genuinely is free — you don't pay transaction fees, and you may not pay terminal rental either. The provider covers the cost of the terminal and recoups their money from the surcharge.
There are other models too. Some providers offer heavily subsidised terminals where you pay a low flat fee and no per-transaction cost. Others bundle "free" terminals into longer contracts where you're locked in for 3–5 years. The devil is always in the details.
The Pros of Free Eftpos
Let's be fair — for a lot of businesses, surcharging-based free eftpos is genuinely a good deal. Here's why:
- Zero processing costs. You keep every dollar of the sale. For a business processing $50,000+ per month in card transactions, that can save thousands a year in fees.
- No terminal rental fees. Many free eftpos providers include the terminal at no charge, which saves you the monthly rental you'd pay elsewhere.
- Simpler cash flow. When you know exactly what you'll receive from each transaction (the full amount), your bookkeeping gets easier.
- It's legal and regulated. Surcharging is completely legal in Australia, as long as the surcharge doesn't exceed the actual cost of accepting the payment. The RBA oversees this.
The Cons — And What to Watch For
Free eftpos isn't right for every business. Here's what you need to consider:
Customer pushback
Some customers don't like surcharges. Depending on your industry and clientele, adding a surcharge could create friction or complaints. Hospitality businesses, particularly higher-end ones, sometimes find that surcharging feels at odds with their customer experience.
That said, surcharging has become increasingly common across Australia. Most customers expect it now, especially in casual dining, retail, and service businesses.
Contract lock-ins
Some "free" eftpos providers recoup their costs by locking you into long contracts — sometimes 36 to 60 months. If you want to leave early, you face steep termination fees. Before you sign, check the term length and the exit clause. If it's longer than 12 months, think carefully about whether you might want flexibility down the track.
Limited features
Not all free eftpos terminals are created equal. Some are basic standalone machines with no POS integration, no tipping functionality, and limited reporting. If your business needs integration with your point-of-sale system, check whether the free terminal supports it before committing.
Surcharge transparency
You're legally required to disclose surcharges to customers before they pay. This usually means signage at the counter and a surcharge line item on the receipt. Make sure your provider handles this properly — non-compliance can attract penalties.
The surcharge cap
As of the RBA's updated guidance, surcharges must reflect the reasonable cost of accepting the payment method. You can't surcharge more than what it actually costs you. Some providers set the surcharge themselves; others let you choose within a range. Either way, understand what rate is being applied and how it's calculated.
Is Free Eftpos Right for Your Business?
It depends on your situation. Free eftpos tends to work best for:
- High-volume businesses where the fee savings are significant — think busy cafes, takeaway shops, pubs, retail stores.
- Businesses with price-insensitive customers who won't blink at a small surcharge.
- Businesses that want simplicity — no monthly bills, no merchant fees, just plug in and go.
It might not be the best fit for:
- Premium hospitality or luxury retail where surcharging could feel out of place.
- Businesses that need advanced POS integration — check what the free terminal supports.
- Businesses that value flexibility — if the deal comes with a long lock-in contract, you're trading flexibility for free.
How to Find the Right Free Eftpos Deal
If free eftpos appeals to you, the next step is comparing providers. Not all free eftpos deals are the same — surcharge rates vary, contract terms vary, terminal quality varies, and the level of support varies dramatically.
This is exactly the kind of thing an eftpos broker does. At Eftpos Brokers, we compare over 20 providers — including several that offer free/zero-cost eftpos models — and find the deal that genuinely fits your business. We'll also compare free eftpos against traditional merchant-pays models, so you can see which one actually saves you more money in your specific situation.
And if you're already on a free eftpos deal but aren't sure whether you're getting the best terms, we'll review that too. Sometimes the surcharge rate is higher than it needs to be, or the contract terms are unnecessarily restrictive. There may be a better deal available that you don't know about.
The consultation is free, and there's no obligation. We'll give you a straight answer — even if that answer is "stay where you are."
Book your free consultation here or call us free on 1800 595 340.