Contactless cards

Pay and go

Contactless payment technology is becoming more common as this fast payment method allows you to pay for transactions under $100 by tapping or waving your card. For transactions over $100, you can still tap your contactless card, but you will also need to enter your card PIN on the merchant's terminal.

Here we explain how contactless cards work.

How contactless cards work

Your payment card is 'contactless' if it has a radio antenna in the plastic which transmits information to and from the contactless checkout terminal.

Any of the following kinds of cards can be contactless:

  • credit cards
  • debit cards
  • prepaid cards.

They can also be linked to more than one credit or deposit account.

If your contactless card is a credit card, transactions will always be drawn from your credit card account - even if you also have a transaction or savings account linked to the card.

If your contactless card is a debit card, transactions will be drawn from your transaction or savings account.

If your contactless card is a prepaid card, transactions will be drawn from the value you have loaded to that card.

How you know your card is contactless

Cards with this feature are usually marked with a special logo or marking like this one:

contactless card symbol

If you are not sure if your card is contactless, speak to the card issuer.

Paying by credit or debit using your contactless card

If you want to make a contactless payment by tapping or waving your card, you should consider what type of card you're using - a credit card or a debit card - to make sure you know where your payment is coming from.

Credit card payments

If you are using a credit card, all your contactless payments will go onto your credit account, and will need to be paid back as usual. You may be charged interest if you don't pay back all of the amounts you borrowed by the date on your credit card statement.

Even if you have linked a savings or transaction account to your credit card, the contactless payment will go onto your credit account.

If you want to use your own money from a linked savings or transaction account instead, you will need to insert your card into the terminal at the checkout and select 'SAV' or 'CHQ'.

Debit card payments

With a debit card, there is no credit account linked to your card. Therefore, when using a debit card for a contactless payment, your payment will be made using your own money in your bank account.

Contactless payments using dual network cards

Most debit cards allow you to make a payment using more than one payment network. Contactless payments with a debit card can be made using either Visa or Mastercard or through EFTPOS.

These types of debit cards are known as dual network cards.

How will my payment be processed?

Some businesses display a notice at the point of sale explaining how they process payments.

By default, many businesses currently process contactless transactions through Visa or Mastercard - even if you're not paying by credit. This can affect the surcharge you pay on the transaction.

Some banks are changing the way contactless payments are processed, which will allow businesses to:

  • choose to process all contactless debit payments through EFTPOS, rather than Visa or Mastercard
  • let you choose how your contactless payments will be processed, or
  • have different default settings for payments of different sizes.

If you want to choose how your payment will be processed, don't 'tap and go'. Instead, insert or swipe your card at the checkout, then select either:

  • 'SAV' or 'CHQ' if you would like to pay by EFTPOS, or
  • 'CR' if you would like to pay by Visa or Mastercard.

The money will still come from your bank account, even if the payment is processed using the Visa or Mastercard network.

Why does the payment network matter?

The network used to process your payment may matter because it can affect the surcharge you pay.

Also, sometimes different networks run promotions where you are only eligible for the promotion if your payments are processed by that network.

Always read any signage at the point of sale to find out which payment network is right for you.

Surcharges on your purchases

Some retailers add a surcharge to the amount of a purchase when you use a card to make a payment. This is because accepting a payment in this way costs them more than accepting cash.

Some card payments are more expensive for the retailer than others. For example, when you choose to pay by credit, it usually costs the retailer more than when you choose to pay by your savings or cheque account, so they may add a surcharge.

Retailers must put up clear signage to let you know if you will be paying a surcharge when you use your contactless card.

If there are surcharges on debit card payments, they are typically around 0.5% to 1.0%. Not all contactless purchases incur a surcharge - check with the merchant about whether they add a surcharge for card payments, and whether the way you use the card makes a difference to whether a surcharge is added.

One retailer has introduced measures to improve disclosure of the surcharges it adds to contactless payments in response to ASIC's concerns. Read the ASIC media release.

Ban on excessive surcharge fees

Businesses are banned from charging excessive payment surcharge fees on certain debit, credit and prepaid card transactions. This means a business cannot charge you more than what it actually costs them to process your payment.

Visit the Australian Competition and Consumer Commission's website for more information about credit, debt and prepaid card surcharges.

Problems with your contactless card

Be sure to check your account statements closely. If you see any purchases that you didn't make, contact your card issuer immediately. If the card issuer is a member of the ePayments Code, then you will have some consumer protection.

See unauthorised transactions on your bank account for more details.

Speak to your card issuer if you have any concerns about your contactless card or you want to know more about the security of this feature.

Related links

Last updated: 18 Jun 2018