Monday moneyvator: Avoid the debit card “tap and go” fee trap

Monday moneyvator: Avoid the debit card “tap and go” fee trap

Back in 2014, I wrote a blog about how the “tap and go” trap was costing Aussies big time. Fast forward to present day and Aussies are still being stung with fees for the convenience of paying via payWave and PayPass with their debit card.

Why? Well, the reason comes down to the fact that all contactless payments continue to be processed through the credit card network, so the merchant fees that apply to credit cards are also applied to “tap and go” debit card purchases.

Here’s a quick snapshot of just how much some merchants are charging:

Retailer Surcharge
Aldi 0.5% on credit cards and “tap and go” debit/credit
Westfield car parks 2.5% on credit cards and “tap and go” debit/credit
Cabcharge 10% on all cards (including EFTPOS)

Thankfully, there has been some good news for consumers, as surcharging regulation on debit and credit cards kicks in from 1 September this year for large merchants and the same time next year for smaller ones.

These changes mean that merchants will no longer be able to make a profit by hiking up surcharges and will instead only be able to pass on the direct costs (e.g bank fees and terminal costs) of accepting a payment to customers. On top of this, gone are the high flat fees that can come with making payments, as surcharges must be charged as a percentage of the purchase.

While these changes will reduce the cost of surcharges, it’s not the end of fees entirely, so if you want to avoid the “tap and go” trap, here are a few strategies:

1. Pay via EFTPOS: Rather than paying with the convenience of “tap and go” at the checkout and being slugged with a credit card fee, insert your debit card and pay via savings or cheque.

2. Carry cash: While the above tactic generally works, unfortunately some merchants apply a fee for any type of card transaction – especially for transactions under $10. That’s why it’s a wise idea to always carry some cash on you to avoid this bite. Of course, that being said make sure you avoid the ATM fee trap by only withdrawing from your bank’s ATM network.

3. Catch a ride with Uber: If you’re sick of the high surcharges that often come with catching a taxi, there are two things you can do about it. Either take on point 2 and pay with cash or join the Uber community, which generally offers lower fares and provides fee free transactions with the swipe of your phone.

Have you been stung with a “tap and go” fee? Share your story in the comments below…

Monday moneyvator: Avoid the debit card “tap and go” fee trap was last modified: June 29, 2016 by Rebeccah Elley

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8 Comments - Write a Comment

  1. Yeah, swipe that card like it’s 1984. Is eftpos completely retro or just a dinosaur ripe for extinction?
    The saving at Aldi is way more than 0.5%. and if you use ING you’re also getting 2% back.

    1. Mozo

      Hi Ben,

      That’s very true, you can definitely save by shopping at Aldi and using debit cards with cash back offers like ING Direct is a smart idea. But why not add to those savings by avoiding extra charges and taking a few seconds to insert your card?



  2. So why is it that I use the same electronic terminal in the shop, and they tell me there’s no charge for eftpos, as long as I select CHQ or Savings and enter my PIN, but to tap and go costs an extra fee?

    Do the banks, or appropriate financial institutions actually charge differently for the two services provided on the same machine?

    The news of the regulations coming into force is great, but it’s still bemusing that there’s such disparity and inequity. With any luck that will be addressed.

    1. Mozo

      Hi David,

      The reason you’re getting charged for “tap and go” purchases is because those contactless transactions go through the credit card network (not the EFTPOS network like when you insert your card and select CHQ or Savings), which generally has higher fees attached.

      Yes agree, that’s very true, the RBA’s new regulations that will kick in later in the year is great news for consumers and should put a halt to merchants making a profit on transactions through charging more than the actual cost of accepting the transaction.

  3. Is THIS…even LEGAL?.!!!;
    I’ve been using PayPass at my local Newsagent, for a while. The Owner, ALWAYS takes the card from my hand, even though I ‘resist’ a little, as I felt he might be up to something. Yesterday, I ‘held onto it’ saying I’d like to swipe my card myself, when he tells me at the last second as I turned the electronic terminal towards me “Oh, it’s $1 extra for PayPass!!!”
    I asked him if that was legal, as this was the first I’d heard of it, and NOWHERE else does this! He then went on about how HIS cigarettes are cheaper, and showed me! And said he HAD to charge more to make up for it! (He’s in direct competition with a much cheaper tobacconist a couple of shops away). I then used Eftpos, so not to be charged. He went on and on about his cigarettes being ‘cheap’, like THAT made it ok to be SLY, about the $1 charge. Is THIS LEGAL??? Please help, as I want to make sure OTHERS are not being ripped off, and expose his scam if not LEGAL…. Thank you

  4. I would like to know what the actual charge is! How do you know that they are oncharging the correct amount in the first place. I recently went to a Japanese Cafe and they charged 1.5% for using paywave!

    1. Mozo

      Hi Lea,

      Thanks for your comment 🙂 I definitely understand how frustrating it is to receive a surcharge.

      Surcharging regulation for small businesses like the Japanese cafe you mentioned come into affect from Sep 1 this year. From then on this should give you the piece of mind you’re being charged the correct amount, as the regulations mean merchants will only be able to pass on the true cost of accepting the transaction.

      One thing to keep in mind is paywave goes through the credit card network, which generally costs a merchant more to process. So it’s worth asking the merchant if it’s cheaper to insert your card and manually select SAV or CHQ.

      Hope this helps,



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