Banks make around 2% of every tap-and-go transaction

It’s convenient, it’s quick and it’s making the banks a lot of money, and chances are you don’t even know it.

The introduction of tap-and-go transaction services such as PayWave and PayPass has provided a new revenue stream for the banks, and they are loving it.

Speaking on 3AW Drive, Research Economist at Per Capita, Warwick Smith, said the originator of your credit card makes around 2% of the total sum from every tap-and-go transaction.

“You’ll see around 75-80 per cent of transactions through PayWave, and when you think every time that happens, when you see people tap, tap, tap, it’s one dollar or two, it’s a lot of money…It’s another big stream of money for them that’s relatively new”.

Warwick said some merchants decide to pass the cost onto the consumer by telling them the transaction will cost an extra 2%, but not all.

“My problem isn’t that the banks offer this service and that they charge for it, the problem really is that the cost is not very transparent, in fact a lot of people don’t even know there is a cost.”

Click on the link below to hear the full interview.