You are being charged every time you ‘tap-and-go’

MOST Australians go out of their way to avoid card surcharges. But if you’re a fan of tap-and-go, you are copping hidden fees every time you shop.

Although convenient, tap-and-go payment methods have hidden fees consumers might not know about. Picture: iStock

TAPPING your debit card at check-out is simple, quick and free, right? Wrong.

We all know that paying by credit card can attract a surcharge of anywhere between one and two per cent — cashiers at shops will tell you as much. But using a debit card has always been free. In fact, the Reserve Bank’s 2016 Consumer Payments Survey found that more Australians use debit cards than credit cards to avoid surcharges.

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But in this era of tap-and-go payments, even debit cards aren’t free anymore. It turns out tap-and-go attracts hidden charges that many consumers aren’t aware of.

BUSINESSES PASSING COSTS TO CONSUMERS

Contactless card payments (like payWave or payPass) cost businesses a lot of money. The Australian Retailers Association estimates banks charge businesses around $500 million every year to process card transactions.

“This has happened by stealth and retailers didn’t realise what was happening when they were asked to sign on to tap-and-go,” executive director Russell Zimmerman told the ABC.

Businesses are passing the extra costs to consumers either through transparent means like surcharges on top of card transactions or by increasing the cost of goods across the store.

Supermarket chain ALDI is in the surcharge camp; a small sign on the debit machines discloses a 0.5 per cent charge for tap-and-go payments.

“Rather than ALDI inflating prices across the board to compensate for the credit card acceptance costs (like most of the retailers do), ALDI instead allows customers to make the choice as to the payment method they prefer,” the company said in a statement.

Aldi passes on a tap-and-go surcharge at the checkout. Picture: iStock

STORES CAN CHARGE FEES, BUT CAN’T PROFIT FROM THEM

According to the Australian Competition and Consumer Commission (ACCC) deputy chairman Dr Michael Schaper, businesses have the right to charge consumers with a fee for tap-and-go charges, but they can’t profit off the charges.

“It can be a bit of a trap here for both consumers and for businesses,” he told the ABC.

“For consumers, it’s to make sure they’re aware of the fee and for businesses it’s to remember they can’t charge more than the fee.”

If a business is charging a flat fee for card transactions, they could be breaking the law.

“Almost all of us have seen retailers say if you want to use eftpos, credit card or debit, there’s an extra 20, 30, or 50-cent charge.

“In many cases [the fee] is an overstatement, so they run a bit of a risk there.”

HOW DO YOU AVOID THE CHARGES?

There are two ways to make sure you’re not paying a surcharge for using a card. You can go back to swiping and punching in your PIN, or you can avoid using a card at all. Visit the ATM and do your shopping with cash, but make sure your bank doesn’t charge you for using another bank’s ATM … that’s a whole other kettle of surcharges.