The Playbook For The Modern Man

The Hidden Costs of ‘Tap & Go’ Payments Will Make You Wince

What’s my PIN again?

No one likes jangling around with coins in their pockets, so ever since contactless payments were introduced we’ve hardly looked back. However a new investigation has shown many people have no idea about the underlying costs of the process—in which you may literally be ‘buying time’. Even more worryingly—for those of us addicted to pay-waving (away) our savings—if you use tap-and-go, even on a debit card, you are probably being charged credit-card rates.

Tap-and-go payments are convenient. But they are expensive to process; as Dr Michael Schaper, deputy chair of the Australian Competition and Consumer Commission (ACCC), told the ABC:

“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.”

Dr Schaper went on to say, “All cards (are) processed as a credit transaction by default under the popular tap-and-go system”. Many retailers are now choosing to put that cost back on customers.

There are two ways a business might do this. Either they absorb the processing costs themselves and put their prices up (so that a $3.50 coffee now costs $3.60), or they add a sneaky surcharge at the counter.

“If you do tap and get hit with an extra charge, it is legal.”

Executive director Russell Zimmerman told the ABC that it’s a lose-lose situation, which puts pressure on small businesses’ bottom lines as well.


“This has happened by stealth and retailers didn’t realise what was happening when they were asked to sign on to tap and go.”

He also said that Westpac, ANZ and NAB plan to give retailers the option to process tap-and-go payments through less expensive routes. Until then, however, if you want to help your bearded-barista’s boss not have to keep putting the prices up on his $5.75 chai lattes (or if you want to avoid a surcharge), stick to cash—or remember your PIN.

RELATED: This Free Payment App Just Partnered With Australia’s Biggest Banks


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