Contactless cards

Pay and go

Contactless payment technology is becoming more common as this fast payment method allows transactions under $100 to be paid for by a tap or wave of your card. Here we explain how contacless cards work.

Remember that 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.

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:

  • a credit card
  • a debit card
  • a prepaid card

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. Transactions will draw from your credit 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 simply tapping or waving your card, you should think about what type of card you are using - a credit card or a debit card - to make sure you know where your payment is coming from.

If you are using a credit card you should remember that all your contactless payments will go onto your credit account, and will need to be paid back as usual. If you don't pay these borrowed amounts back in 30 days, you will be charged interest.

Even if you have linked a savings or transactions 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 need to insert your card into the EFTPOS machine at the checkout and select 'SAV' or 'CHQ'.

If you are using a debit card, your payment will come from your own money in your bank account however you use it.

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, for example, when you choose to pay by credit it usually costs the retailer more than when you choose to pay by savings or cheque and 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.

Some retailers charge between 0.5% to 10% on purchases. Not all contactless purchases incur a surcharge - you can check with the merchant if they add a surcharge for card payments, and whether the way you use the card makes a difference to whether a surcharge is added.

If you use a contactless card you might not be aware if there is a surcharge as you are quickly swiping your card and leaving the store.

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 debit, credit and prepaid card transactions. This means a business cannot charge a customer more than what it actually costs them to process a payment.

For more information see credit, debt and prepaid card surcharges on the ACCC's website.

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.

You should 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: 04 Apr 2018