Merchant Card Surcharges - How Do They Know Difference between 'credit' and 'debit' Cards?

Looking at the menu of a restaurant.

It says:

"

All credit card transactions incur a processing fee of 1.0% |

All debit cards incur a processing fee of 0.5% |

All EFTPOS no charge |

‘Tap and Go’ incurs debit/credit card fee

"

How do they know what type of card you use (especially if you tap it).

Also, how does it work when most cards have EFTPOS on them.

I have a debit card (specifically linked to a transaction account, no credit line) and it has 'debit' printed on it but I can still 'tap and pay'. Does this mean I get the 'debit' surcharge?

Also, I thought that 'Tap and Pay' was by default counted as Credit (even if you have no credit line).

Comments

  • -1 vote

    What does your bank statement show?

  • The credit card number itself. e.g. Bank A will have 5123 456x xxxx xxxx for their debit Mastercards, but 5123 987x xxxx xxxx for their credit card Mastercards.

  • It's been a while since I did this stuff, I don't know about the magstripe data but the processor will be able to tell and be able to apple a surcharge.

    The terminal can look at the javacard applets to determine what type of card it is offline.

    Finally the BIN of each card will be able to determine what type of card it is.

    As for eftpos you need to select SAV or CHQ.

    Contactless payments used to default to credit/debit but now merchants can opt in to use eftpos by default which saves everyone money as eftpos fees are very good.

    TL;DR tapping your card from your example will* yield the debit fee but if you want to use eftpos then insert the card and select SAV or CHQ

    • Read above to see how it could end up with eftpos instead of debit
  • apple a surcharge.

    lol classic

  • It has nothing to do with the card.

    its what service is used to complete the transaction on the machine.

    as said SAV or CHQ go thru eftpos. no fee

    tap and go go thru credit card, mastercard and visa charge a fee

    etc

    • I didn't downvote you but let me explain why you are wrong.

      You missed the whole concept of debit cards
      Eftpos does charge a tiny fee
      Contactless payments can use eftpos as of recently

      • Most debit contactless if not all are processed though the master card or visa network. Hence the fee they like to charge

        • How did you arrive at the need to state this?

          Let's break it down for you, slowly.

          Tap and go go thru credit card, mastercard and visa charge a fee

          OP talked about a debit card so I said:

          You missed the whole concept of debit cards

          The network used does not solely determine the processing fees, it's the card type, merchant volume, risk category, network used.

          For example: A visa debit card has lower fees than a Visa platinum credit card.

          Now finally you stated:

          Most debit contactless if not all are processed though the master card or visa network. Hence the fee they like to charge

          If you said this years ago you might be correct and even now maybe as I don't know the volume.

          But it's very wrong to say by tapping your card you are using credit

          And you are repeating I said but with a quantification of the transaction types with no evidence.

          Contactless payments can use eftpos as of recently

          Major super markets are rolling out contactless eftpos as an example.

          Finally you stated

          Hence the fee they like to charge

          Which is a poor attempt at answering OPs

          How do they know what type of card you use (especially if you tap it).

  • The machine records it the type of card and I assume the restaurant has set up an automatic charge to be applied to it. The merchant gets charged by the bank for accepting certain cards, so therefore there is a way to track it.

  • You can test for yourself at Aldi by buying a small value item twice:

    1. tap your debit card - incur credit card fee

    2. insert your card and choose SAV/CHQ and you incur no credit card free

    • Nah, it's not that. Tried making a dummy booking on Jetstar using a debit card and credit card from sme provider (visa/master) and you'll see Jetstar apply surcharge differently.

  • It's not very common, but some merchants who have Tyro terminals can set up their machines to apply a different surcharge depending on the type of card presented - see https://help.tyro.com/s/article/How-to-enable-surcharging

    Halfway down the page, you can see the Tyro portal where you can see they have different surcharge rates for different card types.

    The bottom screen is what the Tyro machine will show when a customer is about to pay. They can press the "info" button to see the list of surcharge rates that may be applicable, and the machine will apply the correct surcharge automatically.