When is a Debit a Credit Transaction?

I just received a new Visa Debit card. It includes a new twist in fooling the masses who do not pay attention. I can already hear the clarification that ‘credit’ confused customers using their Visa debit cards and having to pay credit surcharges, but ‘Visa Debit’ should be presented as ‘do you really want to pay a surcharge?’

Q: When is a debit a credit transaction that attracts credit card fees?
A: When it is Waved or when Credit or Visa Debit that is Credit is selected.

Is this transparency or opaqueness? Regardless, ka-ching!


that … and whoever wrote the terms didn’t know how to hit a newline without creating a fourth bullet point :wink:


It has always amazed me that the savings/cheque button is really no different to credit button as one still has to have fund in ones account for the purchase to go through.

Paywave and travelling overseas there isn’t any other option other than using credit (paywave effectively automatic credit button).

We generally use savings button with our visa debit. …unless paywave is available for no surcharge.Hi


You seem to have ignored the self serving statements from Visa and Mastercard.

They are very clear that if one presses CHQ or SAV the debit is processed through the banking EFTPOS network, but when credit is pressed or the card waved, it is processed by the Visa or Mastercard networks that provide significant value added as if they were credit cards, and extract the same ‘toll’. (/tongue in cheek)

I have long thought the reason government is so in favour of the cashless economy is that it provides untold opportunities for the current as well as additional future middlemen to get their shares of associated fees, all added to our transaction amounts.


This aligns closely with the discussion had last year at:


Should they could be merged @BrendanMays?


You could be right. The other possible reason is cashless means all transactions are traceable and therefore easier to capture taxes. Maybe the government is a middleman as well. The Chinese government is supporting cashless I expect for these exact reasons. It also restricts the cash economy and currency counterfeiting.

The ACCC found that debit/eftpos card surcharges are low compared to credit cards so it is better for the merchant to have payment using debit/eftpos where charges are not passed onto the customer at the point of sale.

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I hate to break this to you, but pretty much every time you look at your bank statement. It’s… nerd accounting time!

Your bank issues you with bank statements, but they are written from the bank’s perspective. In accounting:

  1. cash is an asset
  2. a debit to an asset means it is getting bigger/better
  3. a credit to an asset means it is getting smaller (bad).

So - when you see a credit on the bank statement, what you are actually seeing is a bank saying to itself “We now owe @PhilT some more money!” When you see a debit, “We owe our customer less money. Party time!”

If a bank statement is being written from your perspective, then as you deposit money you would see a ‘debit’ and a withdrawal would appear as a ‘credit’. Debits are good, credits are bad.

Thank you for the opportunity to go full accounting nerd on you - sorry I can’t solve all your other problems ;).

Wait - is a Visa Debit Card a debit card or a credit card? Is it using your money or theirs? I do not understand the purpose of this card.

Yes and no. Yes because we all know what a debit card is and is not and there is that thread, but no because this was intended to be a shonky. Oh the decisions!

Unless of course they wave, or press Visa Debit, or press credit :wink:

I think @PhilT was making the point when was a Visa Debit card transaction treated for the purposes of surcharges and such as a Credit Transaction. He then points out it is if you use it as if it was a Credit Card Transaction or you use it by means of paywave. In those cases the transaction is through the Visa CC system and it attracts the CC fees even though you are using your own money out of your linked savings account. If used as a purely debit card in many of these situations no charges would be levied…

The purpose was and probably still is to allow transactions to occur as though they had been done with a credit card but that the funding was not third party ie your bank and Visa but rather your own funds in your account. This had the benefit?? that if someone took your card and used it they couldn’t access more than what your account held (oh that makes me feel safer …SARCASM) whereas if they stole a real CC they were stealing someone else’s money. Guess whose money they would work harder at to get back or would have insurance against loss? That I’ll let you answer yourself.

But the ability to use it like a credit card can be useful when dealing with some online traders, and other payments that want to only use CCs. However there are some businesses that don’t like these cards and will not accept them for payment purposes. It is also used when people cannot obtain a CC because of some issue eg bad credit rating and this type of card then allows them to do CC type transactions that had been denied them before.

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It is clearly the monetisation of payments where Visa and Mastercard felt they were not getting their profits from EFTPOS transactions, so in they came with their debit card pretending to be a credit card in their clearing system, with all that ‘substantial value added’ so they could charge their ‘tolls’ :smiley:


I couldn’t agree with you more on these per ticket charges. They are a bloody ripoff as well. These are a part of corrupt practice that you find elsewhere. Examples are, credit card surcharges, unconscionable bank fees on ordinary consumers as well as businesses in the form of interchange fees, credit card companies surcharging businesses excessively, all of which then flows to all of us as surcharges on the retail price whenever you use a credit card or even a debit card.

Lastly there are good old utility companies and their deliberate use of confusing power bills, that contain fees of one sort or another, as well as very difficult to understand contracts that lock you in for a period of time. All of this is cleverly designed to confuse and stress us all. We find the pace of modern life quickening with each passing year. These companies make full use of this to immorally advance their own pecuniary interests through complex contracts, billing practices and the imposition of one charge or another.

The ALDI supermarket chain surcharges any Debit card that is linked to Visa or MasterCard. They do this because they can get away with it. It is the same old story; all due to a lack of a proper regulatory framework that is designed to protect the public from this behaviour.

As a preliminary to the following comments about EFTPOS cards, I want to stress that I am not employed by EFTPOS Australia, UBank or the NAB. Other banks may have a ‘stand alone’ EFTPOS card with no links to Visa or MasterCard. I simply do not know although I am sure that they will in future. It is unavoidable in my following advice that I keep referring to the NAB because to my knowledge they are currently the only major bank with an EFTPOS card with a smart chip, that is also not linked to credit card companies such as Visa & MasterCard.

I have a tiny bit of good news for all, with a heads-up to anyone interested in avoiding the surcharge of 0.5% at ALDI.

Australian EFTPOS cards are evolving and have computer chips in them. Eventually you will be able to use them online. I don’t know when that will happen. The NAB has released an EFTPOS card with a chip in them about a year ago that does not have the usual credit card logos on the front of them.

If you have an NAB EFTPOS card that has a computer chip in it but does not have a Visa or MasterCard logo on it, you can avoid the surcharge of 0.5% at all ALDI stores in Australia.

It is essential that your Debit or EFTPOS card DOES NOT HAVE A VISA OR MASTERCARD LOGO ON IT, because if you do you will not escape ALDI’s surcharge.

This is how you can avoid the surcharge:-

Firstly, NEVER USE ALDI’s payWave facility with the aforementioned NAB EFTPOS card. IF YOU DO YOU WILL BE SURCHARGED.

I love the efficiency of contactless payments but in this case I completely avoid it.

  1. Swipe the card and place the EFTPOS card into the reader with the card’s chip going into the machine first.

  2. Choose if you want any cash out from your account or not.

  3. I do not remember exactly when you are asked for your PIN number, so enter your four-digit PIN number whenever you are asked for it.

  4. Select ‘SAVINGS’ or ‘CHEQUE’ however, NEVER SELECT ‘CREDIT’.

  5. The good news is that you will only be charged the exact amount in dollars and cents. No horrible, annoying and immoral surcharges of 0.5% will be lumped at the end of your bill.

  6. Check your paper receipt to confirm the veracity of what I am telling you. You will be pleasantly surprised as I was when I first used this EFTPOS card in this manner. I have been using this EFTPOS card for several months without a problem.

If you are a regular shopper at ALDI and want to use this sort of card, it is a good idea to set up a regular deposit from another account through the internet, even if it is from another bank account. It could be a monthly or fortnightly deposit with an amount of money that suits your needs.

The NAB do not support an Auto Top-Up facility for this account however if you have an ‘Ultra’ account with UBank you can set this up for free. This will save you having to go to an ATM or do any banking to keep the EFTPOS card flush with funds.

The NAB EFTPOS card is free and can be obtained from any suburban branch. There is no annual fee or any monthly account keeping fees for the card as well. If my memory serves me well, you can set the EFTPOS card up so that you cannot go into deficit by going below a zero balance and thereby incurring bank fees and charges. If you set the card up in this manner and do not have sufficient funds to pay for your goods, you will not be able to take any goods out of a shop as a purchase has not been transacted.

It is not correct that the ALDI supermarket chain surcharges any Debit card that is linked to Visa or MasterCard.

Excepting for that blanket statement, the rest of your description was spot on. A summary of the technology behind the “experience” is that chipped cards are chipped cards, but not all chipped cards are wavable. The wavable debit cards are Visa/Mastercard that can be cleared either through their credit Visa/MC network (they make $) or the EFTPOS network (roughly cost recovery) depending on whether you select CHQ/SAV/CREDIT. Waving is always a credit cleared transaction by definition and the transaction is done through their credit network, and they charge their fees.

Waved transactions are cleared through the credit card system with all its costs (and supposed extra consumer protections) even though they are are debit cards that will immediately debit your account. If you insert the card into the terminal and select CHQ/SAV they are cleared through the EFTPOS system as a direct debit. All the Aldi stores in my area have signs on the terminal advising if you wave you will be surcharged. Prior to the signs the Aldi staff always stopped me if they saw I was going to wave a card, and explained it.

Any shop that has a credit card surcharge will apply it to a waved debit card because it is cleared through the Visa/MC credit network UNLESS you put the card in the terminal and select CHQ/SAV. It is not just Aldi.


Thank you for clarifying my mistake about Debit cards with Visa or MasterCard embossed on them, and whether they will incur a surcharge. Any Debit card should not incur a surcharge at ALDI as long as you do not use their payWave facility and select ‘Savings’ or ‘Cheque’ but never select ‘Credit’.

I have been using credit cards for years and never really took any notice of Debit cards until ALDI introduced their business in Australia and the Reserve Bank allowed businesses to surcharge credit cards. I needed to be able to use a card in order to escape any surcharge and that’s when I found out about EFTPOS cards and/or Debits cards.

Come to think of it, I distinctly remember being told by staff members at ALDI that using my Coles Reloadable MasterCard which is a Debit card, in the same manner that I have described for my NAB EFTPOS Card above, by avoiding the payWave facility, swiping & inserting the card with the chip end first and entering my PIN number, will be surcharged even if I select ‘Savings’ or ‘Cheque’.

This is no mistake. It happened to me several times. I referred this issue to the Customer Service team at Coles Reloadable MasterCard and they did not have a way for me to avoid the surcharge at ALDI with their Debit card. It was this experience that led me to conclude that what is required is an EFTPOS card that does not have Visa or MasterCard on the front of it, to always select ‘Savings’ or ‘Cheque’ but never ‘Credit’ and to never use their payWave facility.

I have never used any “preloaded” card so have no experience. But thanks for that add-on!

Reality is that preloaded cards are a profit centre for the issuers. If one has a transaction account why would one use a separate preloaded debit card domestically (or internationally for that matter)? Lots of claims but think about them. The single one that truly holds water in my opinion is limiting exposure of fraud to the balance on the card, not the balance in your account.

Google “preloaded debit card fees” and look at the reality behind a few. For Coles it lists “Tap and Go” which is Mastercard’s wave. Further on, “You can use your Card to buy goods and services from merchants in Australia and around the world who accept MasterCard® prepaid cards.” That suggests it is a Coles branded Mastercard product that does not use the EFTPOS network, ever. .Further “MasterCard’s Zero Liability Policy” strongly suggests it is always treated as a credit network transaction to get that liability cover. Note it is not “Cole’s guarantee” it is Mastercard’s. Forgetting the Coles card, if a debit transaction is cleared through EFTPOS there may be no similar or at least much weaker “guarantees”, issuer dependent. There is no clarity on that I can find, and virtually all issuers are now using Visa or Mastercard clearing services. Why? $$$ in pockets for services rendered by them, and upfront and (probably) trailing commissions for the “selling agent” who gets you to buy into their card.

The obfuscation behind the cards is pretty clever, is it not? Profits from behind the scenes. I hope your experience with the Coles card makes better sense why you get surcharged.


Good spotting, I’ve moved the original post into this new topic :thumbsup: Will keep this in mind for Shonky submissions @PhilT

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Hi @BrendanMays, I submitted it to Spot A Shonky and the reply is Shonkily still advertising the 2017 awards. :smiley:

Also, a reminder to always put the newer thread onto the older one to avoid corrupting the timeline. The posts now go from (as I type) 22 to 2 hours ago, back to August 2016, and back to 2 hours ago.


Thanks @PhilT, I’ll flag this with our digital team.

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I was recently paying to the government by a card. In their request it was stated that a credit card payment would attract a fee. So I had to send them an authorisation form. To avoid this fee, on it I ticked the “bank” card box to pay with my debit visa card. It didn’t work that way. They still charged me the CC transaction fee. Now I’m asking my bank why. So far, the only answer I got was "you have to use “savings” selection. Sure I would if I could.

For me, using a Credit card means I’m drawing on someone else’s funds to pay for whatever-it-is and I’ll eventually have to pay it back, along with whatever charges apply for having that option. Using a Debit card means I’m drawing on my own funds to make the payment, and since that is the case, no additional charge for that payment should be due to anyone. As the meerkat says, Simples.

Roll on the Banking Royal Commission…