Contactless card technology like payWave, payPass costing us millions to ‘tap and go’

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As seen on ABC News
Tuesday 26 April 2018:

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.

“It really does require customers to make sure when they buy something they ask that question,” he said.

“I think too many of us probably don’t because we assume we’re not going to be charged for it.”

Dr Schaper said some businesses would be absorbing the higher fees by passing on the cost to consumers in other ways.

“If you’re buying a cup of coffee [for] $3.50 and you’re getting charged another nine or 10 cents for a fee, that might be one way,” he said.

“The next shop down the road might be charging $3.60 and they don’t really bother about trying to work [fees] out because they’ve covered it effectively through their basic costs.”

The ARA works to ensure retail success by informing, protecting, advocating, educating and saving money for its 7,500 independent and national retail members, which represent in excess of 50,000 shop fronts throughout Australia.

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