How to avoid EFTPOS bank fees

What does least-cost routing mean for you?

The Reserve Bank of Australia has introduced least-cost routing (LCR) to increase competition in the debit card market, help to reduce the cost of payments for merchants and bring down the overall cost of goods and services.

Find out what least-cost routing means for you.

What is least-cost routing?

Previously, when using your debit card for contactless transactions it would be processed using the Visa or Mastercard network and the merchant would be charged a fee for the transaction. Now, if it’s cheaper for the merchant, the same contactless transactions will be processed through the EFTPOS platform than using the Visa or Mastercard network.

How does it affect me?

Even though the way you pay for things hasn’t changed, the automatic selection of the EFTPOS platform may mean you incur charges from your bank.

Some bank accounts incur a fee for debit transactions made through the EFTPOS network which will apply even if you didn’t select SAV or CHQ at the checkout.

Check with your bank if your account incurs EFTPOS transaction fees and review your bank statements to see if you are already being charged for EFTPOS network transactions. 

It’s also important to consider whether the merchant charges fees for using the Visa or Mastercard network as this may be greater than the fees charged for using the EFTPOS network.

How can I avoid fees?

You can avoid fees on debit transactions by:

  • Using mobile pays, like Apple Pay and Google Pay, as they won’t default to the EFTPOS system.
  • Open a bank account that includes free debit transactions.
  • Insert your card and select CR instead of using contactless payment methods.
  • Pay with cash.

The information in this article has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained in the document is general advice and does not take into account any person's particular investment objectives, financial situation or needs. Before acting on anything based on this advice you should consider its appropriateness to you, having regard to your objectives, financial situations and needs.