What Makes Up a Transaction?

It’s hard to miss the transaction trend that has been on the rise in the last year. In fact, in the last 12 months, the number of Australian transactions with a surcharge has more than tripled. With businesses suffering from financial loss due to the pandemic, transactional surcharges have become the norm, and in a predominantly-cashless era, chances are that consumers are paying surcharges multiple times a day.

Once upon a time, AMEX was likely to be the only card that had a surcharge associated with it. In 2022 however, over 40% of transactions came with a surcharge. WIth most merchants charging a small fee for any card payments these days – including credit cards, debit cards and prepaid cards – it’s important to understand what we, as consumers, are paying for.

What’s the meaning of a transaction?

Literally speaking, a transaction is defined as an exchange or transfer of goods, services, or funds between two parties. With time, this exchange has become more complex and costly for both the merchant and the consumer, as numerous third parties get involved and charge higher fees. 

What is an example of a transaction?

Buying a burger down the road? Paying for petrol? Ordering furniture online? These are all examples of basic transactions. Transactions, and their surcharges, become more complex when they involve things like mortgage repayments, house purchases, or credit card loans.

What should consumers know about transactions?

Considering 85% of consumers pay credit card surcharges, we think it’s pretty important that customers are informed about transactions, payments, and the fees involved.

According to the ACCC, businesses can charge a surcharge for paying by card, but the surcharge must not be more than what it costs the business to use that payment type. They also have to display the surcharge in the price so that you’re aware that you’re paying it. 

When you make an electronic payment for goods and services there are many intermediaries involved that charge a processing fee. With cash in decline and digital payments on the rise, merchants are no longer able to fully absorb this cost of payment and are passing this back to you, the customer, in the form of a surcharge; and sometimes in the form of a hidden cost. The important point to note here is that although these surcharges may not seem insignificant individually, over time they do accumulate. 

How can these additional fees be avoided? By choosing a no-surcharge option where available.

How can you take back control of your payments? 

With Waave. What’s Waave? Well, put simply, it’s a payment app that allows you, as a consumer, to manage your money in one place. It allows you to take back total control of your money, by letting businesses to transact with you, for cheaper. It has reduced up to 80% of merchant fees for businesses, meaning that there are less costs that merchants need to pass on to the customer. 

Think of it as modern-day direct debit; or the 21st century version of traditional payments.

Using data and open banking technology (which we explain here), Waave helps businesses avoid unwanted costs, schemes, fraud, hidden fees or chargebacks. So it’s better for them, and ultimately, better for you.

Plus, the Waave app gives you visibility into all your bank accounts, allowing you to easily use them for payments (without a fee!) and giving you a clear look into your available funds and spending history.

Download the Waave app for free today.

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