The true cost of 'tap and go' may surprise you

Hailed Renault
26 April 2018

The true cost of ‘tap and go’ may surprise you

Until now choosing to “tap and go” at the checkout has been free — or so you thought, right?

Contactless card payments are expensive for businesses to process and some retailers are now opting to put that cost back on customers.

Dr Michael Schaper, deputy chair of the Australian Competition and Consumer Commission (ACCC), said consumers “hooked” on the technology often had no idea about the underlying processing costs.

“Many people don’t realise that when you use paywave it is processed through the credit card system and for most businesses there is a fee they’re charged through their bank or their card operator,” he said.

Businesses can already pass on a 1 to 2 per cent surcharge on normal credit card transactions, but the fee charged by banks to process debit and eftpos purchases is much lower.

The Reserve Bank’s 2016 Consumer Payments Survey showed more Australians used debit cards than credit cards for this reason.

But Dr Schaper said all cards were processed as a credit transaction by default under the popular tap-and-go system.