You may have noticed that some Visa payWave transactions (also known as “tap and go”) that were previously fee-free Visa transactions have instead become eftpos purchases.
What has changed?
“Tap and go” contactless transactions have become hugely popular as they make payments incredibly fast and simple. Until recently, these transactions were the exclusive domain of multi-national companies such as VISA International.
Our domestic provider, eftpos Australia has realised that they’ve been missing out on revenue as more and more people “tap and go”. So they’ve jumped on the “tap and go” bandwagon.
Why is eftpos “tap and go” such a big deal?
eftpos Australia, wanting to enter this space, forced the Reserve Bank to take action to promote competition amongst providers. The result is called Least-Cost Routing. This is where a merchant can choose to route a Debit Card transaction to the lowest cost network, which in many cases will be the eftpos network.
The impact of this was felt on a large scale from October 2019 when major retailers, namely Coles and Wesfarmers (including Woolworths) opted in, with their systems automatically routing payWave transactions to eftpos; just as if you had selected “Savings” on a terminal.
Am I likely to be affected?
Yes, you may be affected if:
- You use a Visa Debit Card
- You make “tap and go” Visa payWave purchases in store, and
- The merchant has opted in to “Least-Cost Routing”
As a result, your transaction may be routed as eftpos and you may incur an eftpos fee.
I shop online using a First Option Visa Debit Card. Am I affected?
No, Least-Cost Routing does not apply to online transactions.
I have a First Option Visa Credit Card. Am I affected?
No, Least-Cost Routing only applies to Debit Cards.
Tips to avoid being charged for payWave transactions
- Insert your Visa Debit Card, or “dip the chip”, then press “Credit” and enter your PIN, rather than using payWave
- Use a Credit Card instead of a Debit Card – as they are unaffected. Get in touch with our Lending Team if you wish to apply for our award-winning Low Rate Credit Card
- Maintain a relationship balance of $25,000+ with First Option. You won’t be charged for eftpos transactions – so continue to shop the same way you do now.
We hope this helps you enjoy your Christmas shopping without any unnecessary fees. And if you have any tips for avoiding transactions fees, please send us an email.