Morning coffee? Tap. Filling up on fuel? Tap. Got a hot dinner date tonight? Tap. Tap. Tap.

Spending money today has become as easy as a tap, but this incredible convenience has a sneaky hidden cost - surcharges.

“Oh you mean that extra 5 cents I pay for my coffee? I don’t care about that!” Ohhh you’re about to Flux Fam!

Get this: Australians are losing nearly $4 billion a year in card surcharges. That’s roughly $140 per person, but some experts reckon that estimate is on the lower end.

Bet those extra 5 cents are looking a little different now, aren’t they?

What are these card surcharges?

Businesses need to pay processing fees for accepting certain card payments, and different cards cost businesses different amounts.

Quick rule of thumb: Debit cards are usually cheaper, and credit cards are more expensive.

So, to afford these processing fees, businesses often apply a surcharge to each transaction and pass the cost of processing payments onto the consumer. 

This surcharge is usually around 0.5%-2% of the purchase price you’re paying, but sometimes it can also be a flat fee depending on what the retailer chooses to apply it. 

Here’s what those surcharges look like:

• EFTPOS debit and prepaid: Under 0.5%
• Visa and Mastercard debit cards: 0.5%-1%
• Visa and Mastercard credit cards: 1%-1.5%
• American Express credit card: 2%-3%

Now, larger businesses like Woolies and Coles don’t push surcharges onto the consumer because they’re big enough to absorb the cost themselves.

But smaller businesses like your local sushi joint, or bar may not be able to absorb the cost, and therefore will pass the cost onto consumers.

Now, here’s the catch…

You’re probably paying more in card surcharges than you have to. 

Most debit cards - the payment method most Aussies use - are dual network cards.

That means, they operate through the Mastercard/Visa network, and they also operate through the EFTPOS network.

When you tap your debit card, the transaction is automatically processed through the Mastercard/Visa network ie. the more expensive network.

But, if you insert or swipe your card, you can choose the EFTPOS network, which means you’ll pay a smaller surcharge, approx. 0.3% on your payment.

Now, that might seem like an absolutely negligible amount, but if you’re incurring transactions of hundreds or thousands of dollars, that surcharge saving starts to matter.

For example, if you’re buying a new couch for $2,000, choosing EFTPOS could save you around $14.

Avoiding card surcharges

Luckily by knowing how card surcharges work, you can pay less in fees, and make sure there’s more cash going in your pocket, not the banks.

There are a few ways to dodge these pesky surcharges.:

1. Paying with cash:

If there’s a sure shot way of avoiding surcharge payments, this is it. 

Go old school with the coins and the notes to ensure you're paying $0 in surcharges.

2. Insert/swipe your card instead of tap: 

Cash can be a bit hectic, so if you’re keen to stick to the plastic, consider avoiding the tap to make sure that when you do pay surcharge, you’re paying EFTPOS rates, which are lower than Mastercard/Visa.

3. Prioritise businesses that don’t charge surcharge:

Keep your eyes and ears peeled for businesses that aren’t charging processing fees to customers, so you can avoid surcharges all together.