Tap and go. Contactless. PayWave. Whatever you want to call it, it is how most Australians pay now. According to the RBA, more than 80% of in-person card transactions in Australia are contactless. For business owners, understanding how tap and go works — and how it affects your fees — is worth a few minutes of your time.
What Tap and Go Actually Is
Tap and go is short for contactless payment. Instead of inserting a card and entering a PIN, the customer taps their card, phone or smartwatch on the eftpos terminal. The payment is authorised in about one second using near-field communication (NFC) technology.
Under the hood, the technology is the same whether the customer taps a Visa debit card, a Mastercard credit card, or an Apple Pay wallet on their phone. The terminal reads the chip wirelessly, encrypts the transaction, and sends it off to be processed.
Why Australians Love It
Tap and go is fast, hygienic and simple. It removed the need to touch anything during COVID, and it never went back. For transactions under $100, there is usually no PIN required, which speeds up checkout even more. For business owners, that means shorter queues, faster turnover, and happier customers.
The Catch: Tap and Go Costs More
Here is what most business owners do not realise. When a customer taps a card, the transaction can be routed through different networks — and those networks charge you different amounts.
A debit card tapped and routed through Visa or Mastercard's "scheme" network costs you more than the same card processed through the local eftpos network. The difference can be significant across thousands of transactions. On a busy cafe or retail shop, it can add up to hundreds of dollars a month.
Least-Cost Routing: Your Secret Weapon
Least-cost routing (also called LCR or merchant choice routing) is a setting on your eftpos terminal that automatically sends each tap transaction down the cheapest network. If the eftpos network is cheaper for that particular card, the terminal routes it there. If Visa or Mastercard is cheaper, it goes that way instead.
The RBA has been pushing providers to enable least-cost routing by default, but not every provider does it properly. Some quietly leave it off unless you ask. Others enable it, but only partially. A good broker will check whether your current provider has LCR turned on — and whether it is actually working.
See our full guide on surcharging and LCR rules in Australia for more detail.
Tap to Pay on Phone
A newer twist on tap and go is tap-to-pay on the merchant side. Instead of needing a separate eftpos terminal, you can accept contactless payments directly on the back of your smartphone. Several providers now offer this in Australia. It is cheap, fast to set up, and ideal for tradies, market stalls, mobile businesses, and pop-ups.
For higher-volume retail or hospitality, a dedicated terminal is still usually better — but phone-based tap to pay is a legitimate option for small operators.
Security: Is Tap and Go Safe?
Yes, very. Each contactless transaction uses a unique, encrypted token, so the card number is never exposed to the terminal or the merchant. Fraud rates on contactless are actually lower than PIN-based transactions because of this tokenisation. For transactions over $100, a PIN is still required in most cases, which adds another layer.
What This Means for Your Business
- Most of your transactions will be tap and go. Expect 80%+ of cards to be contactless.
- Your processing fees depend on how tap transactions are routed. Ask your provider about least-cost routing.
- Not all providers enable LCR properly. Some leave it off or only run it partially.
- You may be paying too much without knowing. This is one of the hidden costs we check when we audit a business's eftpos.
- Tap-to-pay on phone is legit. Worth considering if you are a small operator.
Let Us Check Your Setup
At Eftpos Brokers, one of the first things we look at when we review a business's eftpos is whether least-cost routing is enabled and working properly. It is a free audit — we compare 20+ providers and tell you whether you could be saving money just by adjusting your setup.
Book your free consultation here or call us free on 1800 595 340.