Paywave and Merchant Fees

Here’s the thing about how resellers get away with their paywave fees and the piss off it actually created.

Merchant fees have been around for eftpos transactions as long as eftpos has been around. Actuazly, since zip-zap visa slidy carbon backed paper systems have been around (remember them?) It is not new tech. Merchant fees can be 1%, 1.5%, 2% of the transaction in a local store. It can be higher on an online store.

When paywave came into existence, resellers started upgrading their eftpos machines to new contactless tech. Banks started charging paywave fees. But it is not the 2.5% you’re paying. So what’s the give here?

If you want to know what kind of rates are around, check this one out from Westpac
https://www.westpac.co.nz/business/products-services/accepting-payments/westpac-get-paid-instore-or-on-the-go/

Their contactless payment fee is 0.69% So why are you paying from 2.5% at a store?

There’s a few reasons I can rationalise why this is so…

(1) It was set by popular reseller rates (not the banks)… the 2.5% became a reseller introduced standard. If you think back, this seemed to have started in the tourism/hotel/accommodation industry.

(2) It was likely dreamed up so that for once the actual total merchant charges are covered. That is the base merchant fee plus the contactless payment fee. It is not a ‘paywave fee’ alone that the reseller is recouping. Very deceptive.

Given, in our day of running retail stores, we would not dream of asking clients to cover our merchant fees. It just was not done.

But the reality is, there had always been a base merchant rate regardless of the contactless system. And the paywave tech itself is not the reason for the fee. The banks charge a fee for paywave for good reason — the fraudulent misuse of paywave is a real issue.

I remember one Christmas, walking around the Johnsonville Mall and whilst walking around, some prick with a mobile Paywave eftpos unit was ticking up $16 transactions. I got pinged twice so how many times did jo public get caught? And of course there were hundreds in the store and the mobile unit just needed to be on contactless reach continually ticking over transactions.

IF there were 1000 in the mall … you get the picture. By the time you reported it – or even noticed it on your bank statement, if you even looked, the theif would have cashed out and closed up the merchant account.

Yes, paywave fraud is a real thing and this is the number one reason for bank fees of 0.69% typically.

It’s no reason for your local stores to be charging 2.5, 3.5, 5%, 8% in some cases. That is potential theft in itself and you have every right to question the reseller.

My suggestion: Boycott Paywave. Insert or slide the card. Abandon the thievery going on out of your hard earned pockets. Question the reseller over their fees… show them the Westpac/ANZ/ASB/TSB rates… and ask the easy question…why.

Then let us know so we can refine the above.