Why Bank-Operated Merchant Facilities Are Completely Outdated

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Big banks like ANZ, HSBC and Bendigo aren’t keeping up with what modern stores need. Here’s how to make the switch.

News Flash: Your Bank Isn’t Your Business’s BFF

Banks are pretty competitive when it comes to offering regular old accounts to hold your money (though Customer Owned Banks, such as credit unions and mutual banks, still tend to give you better rates and do more good with your money). But when it comes to merchant facilities, the big banks are way behind. Merchant facilities are the actual terminal and corresponding payment processor you use to accept payments in person, such as an EFTPOS/card reader machine in a retail store.

To get one with a bank, you need to submit a lengthy and annoying application, usually pay a fee, and then wait a while. You also need to have a bank account with the bank offering you an EFTPOS terminal, making it that much more of a hassle to update your system. Here’s what Bendigo requires as a part of your application process, as an example.

Bank terminals that process credit cards tend to cost quite a bit, with pretty convoluted fees and terms structures. Who needs it? You don’t.

You can use other financial services to do everything your bank reader would; faster and for less

Nowadays there are several companies that have stepped into the Merchant Facility space, offering Point-of-Sale apps alongside card reading hardware. The most popular ones are:


We’ve talked plenty about PayPal before - it’s one of the biggest non-bank financial companies in the world and is filling up the space of basically everything a bank can do for you. That includes the ability to accept payments online and in-store, offering lines of credit and sending money globally.


Stripe is one of the most popular alternatives to a bank POS/merchant facility. They integrate into tons of different programmes, including Shopify, and can accept payments in pretty creative ways (like directly from a tweet). Their big focus is on accessibility, and trying to make it as easy as blinking to accept payments. They’re also really big on syncing your customer payment info with everything else you use (like accounting, customer management, inventory management, etc).


Square is the slimmest and lightest card reader out there, connecting with your phone or tablet and their free POS app. It’s also one of the cheapest and fastest out there, with transactions costing 1.9% (in Australia) no matter what and payouts happening in as little as a day.

Pin Payments

Pin is an Australian payment processing service that offers some great features, like letting you put payments on hold while your potential customer tries something on at home before deciding.


Cayan is another popular Australian company that lets you use one system to accept payments online, while walking around to your customer, behind a till, while on the phone, on an iPad and anywhere else.


And of course, Shopify has its own in-house version of the POS and accompanying hardware, though you can use a card reader from a few other places along with your Shopify POS.

Receive customer payments, in any form, from anywhere

While most bank-operated merchant facilities only accept payments from in-country, and only let you do full transactions at once, alternatives like Square and Stripe let you accept in a multitude of currencies and digital currencies, including Apple Pay, Google Wallet, and credit cards from anywhere.

They also allow you to be way more flexible with accepting and keeping track of payments. For example, with Shopify, you can allow refunds to be given and then used as store credit instead. You can also usually allow for open tickets, partial payments, deposits, split payments, or part-cash-part-card-part-IOU payments. These kinds of features let you offer more for your customer, and help you make more sales.

Connect with your customers and inventory management

With bank-operated facilities, you simply punch in the amount and your customer swipes. With alternatives like Stripe or Shopify POS, you can see who is buying what so much more easily. That means you can later target people for marketing based on what they bought, when they bought it, where they bought it, or how much they spent.

Square, Paypal and Shopify all allow for customer accounts. My favourite bakery around the corner uses Square, and I downloaded their app and opened an account. It let me simply say my name at checkout, and my breakfast sandwich was added to my “tab”. When I was charged, it automatically sent a receipt as a text message. The Square app also let me see what other businesses near me accepted it, and gave me special offers when I used Square to pay. A bank-operated merchant facility has nothing on that kind of modern customer engagement.

Get more from your reports

Because you can integrate a third party payment processor with Shopify so much better than a bank, you can also generate reports that tell you more. For example, with Square Reports you can find out who are repeat customers and what types of items people are buying in the same ticket.

Set up fast

In general, it’s way faster and more straightforward to accept payments with a service like Shopify or Stripe than with a bank merchant facility. You sign up for an account online, tell them a bit about your business, and get approval instantly. Once you’re approved, you can order hardware like a chip and pin reader and a receipt printer - in the meantime, you can start accepting payments on their POS app or a computer.

“But I need an EFTPOS machine”

Instead of an EFTPOS machine from a bank, you can use Stripe, Square, PayPal, Shopify or several other companies to make exactly the same sales. Shopify has a “Retail” service that lets you upgrade to have employee PINs and more. You can use their chip, tap and swipe card reader, or connect your Shopify retail service with an outside reader.

Square gives you a barcode scanner, the ability to “send tickets to the kitchen” for immediate use, and a cash register.

The one advantage of having an EFTPOS machine is that they often connect with GPRS as a backup -- whereas other terminals like Stripe and Square will require WiFi. If you struggle to get WiFi in your store, this could be an issue.

Otherwise, outside financial services like Stripe, Square, Pin, PayPal, Cayan and Shopify POS offer everything a bank merchant facility does, with far less hassle and far more useful information.

If you’re interested in setting up with a third party merchant facility and want some help choosing or making it happen, we’ve got your back.