Why you should NOT use ‘tap and go’ payment at your favorite cafe

Why you should NOT use ‘tap and go’ at your favorite cafe as small business owners reveal the dark side of the popular payment method

  • ‘Tap and go’ payments attract up to six times more transaction fees than EPTPOS
  • Apple Pay, Google Pay and similar digital wallets impacted by higher fees
  • Council of Small Business Organizations said merchants struggle to absorb fees
  • Small Businesses Paying $67 Million a Month in Excessive Fees


The rise of ‘tap and go’ has left grocery and fuel sellers plagued with higher transaction costs that they can no longer absorb, it was told at a small business summit.

Consumers are unaware that buying coffee with a mobile phone can make it more difficult for their favorite cafe or servo to stay in business due to high transaction costs.

“Transaction costs are rising more than any other,” Mark McKenzie, chief executive of the Australasian Convenience and Petroleum Marketers Association said Wednesday.

Using a digital wallet on your cell phone to buy coffee can make it more difficult for small businesses to operate due to high transaction costs

Merchant fees have become an essential service, akin to electricity bills in their impact on a business, as technological leaps ahead of legacy banking systems, he told the Council of Small Business Organizations Australia (COSBOA) payment freeze.

Payments expert Robbie MacDiarmid said small businesses are paying $67 million a month in outrageous fees for routing payments.

COSBOA members want every transaction to be processed on a least cost route, despite the legacy banks have.

The merchants are the customer of the service, but the supplier makes the decision about how they get that service, and that’s innately wrong, Mr McKenzie said.

COSBOA CEO Alexi Boyd said entrepreneurs often do not know they are getting the maximum amount.

Digital wallets such as Apple Pay and Google Pay can cost up to six times more than traditional bank cards

Digital wallets such as Apple Pay and Google Pay can cost up to six times more than traditional bank cards

Nor would a consumer know that paying through a digital wallet like Apple Pay or Google Pay or making a “tap and go” payment with their phone means the transaction costs up to six times more, she said.

“They don’t have the luxury of a very high net profit on every transaction,” Ms Boyd said.

“In some cases they’re just desperately trying to keep their heads above water.”

They also do not want to take away the choice from the customer.

“We’ve let the evolution of technology go so fast that it’s just too hard to wrap your head around it and really make it into something that makes sense for small businesses,” said Ms. Boyd.

“As small businesses, we say enough is enough.”

Advertisement

.