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Least-cost routing and changes to debit card transaction fees

Least-cost routing is an initiative introduced by the Reserve Bank of Australia to help reduce fee payment costs for businesses on debit card transactions. Since October 2019, you may have noticed changes to your debit card transaction fees.

What is least-cost routing?

Previously, whenever you made a payment with your contactless dual-network debit card (‘tap-and-go') these payments could only be processed via the Mastercard or Visa network. With EFTPOS now offering full contactless functionality, the RBA has introduced least-cost routing. This allows the merchant to decide what debit network is used and pick the cheapest option. This is expected to bring down overall costs by encouraging competition between debit card payment schemes.

Least-cost routing only applies to dual-network debit card transactions – there’s no impact for customers using credit cards.

How least-cost routing affects you

You may incur additional transaction fees on your debit card transactions. This is likely because the merchant has selected EFTPOS as their chosen network. By selecting Credit (CR) at an EFTPOS machine, you can ensure the Visa (or Mastercard) network is selected rather than tapping if you wish.

Avoiding debit card transaction fees

If you’ve noticed any changes, we recommend reviewing your bank statements and speaking to your local branch or calling 13 1905 if you are an RACQ Bank member.

You can avoid unnecessary debit card transaction fees as a result of least-cost routing by following any of the steps below:

  • Insert your card and select the Credit (CR) button to pay with Visa or Mastercard debit
  • Use mobile pay on your phone or smart watch – Apple Pay*, Google Pay, Samsung Pay – Only ‘Tap-and-go’ card payments are affected by these new changes with Mobile Payments continuing to be routed via VISAnet, not EFTPOS.    
  • Pay with cash
  • Open an account that has no fees for EFTPOS transactions like the RACQ Bank Everyday account

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Mobile Pay

Go cashless with your phone or watch. Enjoy Apple Pay*, Google Pay™ and Samsung Pay^ to tap and pay almost anywhere.

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Everyday Account

Get $0 account keeping fees and $0 minimum monthly deposits with an RACQ Bank Everyday Account.

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Banking and loan products issued by Members Banking Group Limited ABN 83 087 651 054 AFSL/Australian credit licence 241195 trading as RACQ Bank. Fees, charges, terms and conditions apply. Contact us for a copy. This is general advice only and may not be right for you.

*Apple Pay works with iPhone 6 and later in stores, apps and websites in Safari; with Apple Watch in stores and apps; with iPad Pro, iPad Air 2 and iPad mini 3 and later in apps and websites; and with Mac in Safari with an Apple Pay enabled iPhone 6 or later or Apple Watch. For a list of compatible Apple Pay devices, see Apple, the Apple logo, Apple Pay, Apple Watch, iPad, iPhone, Mac, Safari, and Touch ID are trademarks of Apple Inc., registered in the U.S. and other countries.

^ Devices compatible with NFC point of sale terminals for contactless transactions include Samsung Galaxy Note 5, Galaxy S6, Galaxy S6 edge, Galaxy S6 edge+, Galaxy S7, Galaxy S7 edge, Galaxy A5, Galaxy A7, Galaxy S8 and Galaxy S8+. All devices are compatible with MST point of sale terminals for swipe transactions except for Galaxy S6, Galaxy S6 edge and Gear S2.