A contactless payment, commonly referred to as a tap-and-go payment, is a feature added to a debit or credit card that allows you make in-store purchases faster. When you make a purchase at a store that has a payment terminal (such as an EFTPOS machine), you just need to hold your card within 4cm of the terminal to approve the purchase without entering your PIN or inserting the card. This is why it’s called a contactless payment, because your card doesn’t need to make contact with the terminal for the payment to work.
If the purchase is over $100, you can still make a contactless payment but you may need to enter your PIN (this varies between banks).
The beauty of making a contactless payment is that it's super fast and really easy to do.
If you're looking to make contactless payments using your smartphone instead of your debit card, read our guides on Google Pay, Apple Pay and Samsung Pay to find out more.
"I've added my ING debit card to my Google Wallet and use tap and go for pretty much every purchase I make. I love it, because it means I often leave the house with just my phone and can still make purchases.
Sometimes if I'm buying something worth more than $100 I'll need to enter my PIN number after tapping my phone, but this is quite rare and depends on the payment terminal. Still, I find this way easier and quicker than having to insert my physical debit card."
Credit cards, debit cards and other devices including smartphones use Near Field Communication (NFC) technology to make secure, contactless payments. The chip in the debit or credit card communicates with the chip in the payment terminal to authorise and process the transaction from a few centimetres away.
The embedded chip allows you to wave your card or smartphone device over a contactless payment terminal (eg, Tyro EFTPOS, Albert EFTPOS or Square) without having to swipe or insert the card into the terminal.
| Response | |
|---|---|
| 75% of the time | 31.21% |
| 100% of the time | 21.6% |
| 25% of the time | 17.17% |
| Never | 15.23% |
| 50% of the time | 14.79% |
PayPass is the name of the contactless payment function offered by Mastercard, and payWave is the contactless payment function offered by Visa. Both PayPass and payWave function in the same way, and are commonly referred to as simply “tap-and-go” rather than their correct brand names.
So if you’ve got a Visa debit card, you’ll technically be using payWave to make contactless purchases. If you’ve got a debit Mastercard, you’ll be using PayPass. Same technology, just different names.
All new bank cards come automatically equipped with contactless payment technology – Visa payWave and Mastercard PayPass. Your card will clearly display “PayPass” or “payWave” in the bottom right hand corner. Just activate your new bank card and you’re ready to go.
If you have an older card that doesn’t already come equipped with tap-and-go functionality, you can simply contact your bank and request a new debit or credit card be sent to you.
Like debit cards, most Australian credit cards give you the option of making contactless payments. This includes Mastercard and Visa credit cards from all the major banks and providers, as well as American Express cards. There are also plenty of credit cards that offer contactless mobile payments with Apple Pay, Google Pay and Samsung Pay (as well as some with Garmin Pay).
You can make contactless payments wherever PayPass and payWave are accepted. These days, it’s most places in major Australian cities and towns, including at supermarkets, department stores, petrol stations, cafes and public transport top-up machines. Look for the contactless payment symbol on the payment terminal.
Yes, tap and go payments are safe. There are a lot of measures in place to ensure you don’t accidentally make a payment without meaning to, or that someone can’t hijack the signal to rob you. Thanks to these, and additional safeguards put in place by Visa, Mastercard and Australian banks, contactless payments are in some ways even more secure than classic debit or credit cards.
Additionally, you’re protected by Visa and Mastercard’s zero liability policies. These state that you will not be held liable for fraudulent or unauthorised transactions made on your Australian issued cards, within reason.
Waving the card next to a terminal instead of inserting generally won't cost you anything extra. However that's only what you see as a customer. On the other end, choosing to tap-and-go can result in different costs for the retailer.
If you’re making a purchase with a debit card – inserting, pressing “Cheque” or “Savings” and then putting in your PIN – the payment will be processed through an EFTPOS system. However if you’re using payWave or PayPass the payment will often be processed through a different system – the credit card networks owned by Visa or Mastercard.
The RBA estimates that retailers pay an average of about 0.55% of the transaction’s value in a "merchant service fee" to their bank when your payment goes through the credit card network. But if your purchase goes through the EFTPOS system, this fee drops to 0.15%. All that tapping of debit cards is probably costing retailers hundreds of millions a year.
As a consumer you probably won’t notice any of this going on in the background, but it may mean for now that the price of the goods you’re purchasing may slightly increase to cover the merchant costs. Since September 2017, businesses have not been allowed to pass on excessive surcharges to consumers on credit and debit transactions made using PayPass and payWave.
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I just went to a bottle shop at Wamuran qld my purchase was $80.00 I was charged
$81.12 why so much I did tap it and if I was to insert it and put my pin in how much would it be ?
Hi Karen,
The amount retailers charge in fees is regulated and must not be more than it actually costs them, in terms of the fees charged by banks and also the cost of managing the transaction. In your instance, you were charged 1.4%. These fees can go as high as 2.5% or even 3%.
Usually, the amount charged is the same whether you select tap and go or insert your card.
Legally, retailers are required to clearly state any fees charged including a percentage, but many places do not comply with this requirement.
Hope this helps.
If someone uses my tap&go card without my authority, what is the crime that they have committed?
Hi Max,
It is your responsibility to keep your debit card secure. If someone gains access to your card and makes a tap and go purchase, unfortunately, you may not get the money back as the bank will likely see this as you being irresponsible with your card. If you notice someone has gained access to your card you should freeze your card right away in your mobile app, internet banking, or by contacting your bank. If the transaction is still pending, the bank may be able to stop it from going through.
Thanks,
Alison
Hi finder.com.au,
A lot of retailers ask for your card and tap for you. Does this void any protection under Visa Paywave/Mastercard Paypass policies since the card leaves my hand?
Hi Aran,
Thanks for your question.
Visa’s Zero Liability Policy protects cardholders from unauthorised charges, so whether it’s you or the store clerk tapping your card, you’ll be covered.
Hope this helps.
just paid by contactless payment but never showed on my account why is this
Hi Gary,
Thanks for your question.
The transaction may not have been processed properly or it just may not have appeared on your account yet. You’ll need to get in touch with your bank/card provider to discuss any questions you have with your personal account.
I hope this has helped.
Thanks,
Elizabeth