Why do I need to choose "Credit" to pay with my Xinja debit card?

Choosing Cheque and Savings when inserting or swiping a card at a terminal had been the way to go at EFTPOS terminals in Australia for as long as cards could be used (since 1984 in fact, when the first magnetic stripe “key card” was introduced). Cheque and Savings transactions were synonymous with transactions from a bank account, and choosing “Credit” was synonymous with using a credit card (duh). Back then, Visa and Mastercard only offered credit cards.

In order to compete with domestic debit networks globally, Visa and Mastercard then started to offer the “Visa Debit” and the “Debit Mastercard” cards – technically these work exactly like the credit cards do, but the funds are debited from your bank account rather than a line of credit. These debit cards work quite smoothly, and provide customers a whole load of benefits like global acceptance, ease of use, global access to a lost/stolen facility, etc. while protecting customers from having to get expensive credit cards to access these features.

In Australia, in the meantime, we already had a domestic network (eftpos, with a little ‘e’) that offered debit cards. Visa and Mastercard could only access the “Credit” button on POS terminals, since Chq/Sav were effectively “taken” by eftpos. The problem is, eftpos is still domestic only, so you can’t really use it outside Australia.

In the interests of simplicity and global acceptance, Xinja cards are Mastercard only – which means you get all the benefits of the good old “key card” and more – the ability to tap, insert, use PIN, withdraw cash at an ATM, and of course the big one - global acceptance. The only wobbly thing is, you need to choose “Credit” to access it at POS.
(Note: there is NO “credit card fee” or any additional fee for this!)
A single scheme which gives you everything you need means easier implementation for us, which of course is cost saving for our customers.

The good news is, when you tap the card, there’s no need to make any choice – your transaction is just processed automatically. So my 2c is - at POS terminals, just tap away! If the transaction is over $100, you can still tap, and will most likely need to enter your PIN.

The only time you really need to insert the card and choose “Credit” is on the very first transaction with your card – but we’re going to updating this so that inserting is no longer necessary at all. Less confusion, happier customers :blush:


I’m not even given the option when I insert my card - it just approves as credit :grin:



I think the following quote is misleading:

there is NO “credit card fee” or any additional fee for this!

Merchants set up fees based on schemes, like Visa or Mastercard. So by choosing not to support eftpos, Xinja is basically leaving us to the mercy of the merchant. If they decide to charge fees for Mastercard, then we will get charged. A good example is Aldi. They don’t charge fees for eftpos but they do so for MC and Visa. Here’s an example receipt for a payment I just did with my Xinja card:

In this case it didn’t matter that it was a debit Mastercard. I was charged fees


I agree I think the whole post is misleading, xinja you have a real opportunity to educate consumers on how products work and how you make money. You promised to be transparent-

  1. Banks make money from transactions, there are set prices for transactions on visa, MasterCard and eftpos , this price is regulated by the rba
  2. Most of the benefits are the same-you still get access to your own money, you get fraud protection etc
  3. Eftpos can only be used in Australia, all countries have a national payments network
    4.Banks make less money from eftpos than they do from Visa and MasterCard
  4. The retailers pay for the ability to accept cards so they actually pay the banks
    6.The retailer can now decide which network they put the transaction through , at the least cost to them-the rba introduced this
  5. By choosing credit you are choosing to send the transaction through the MasterCard network, the retailer pays a higher fee and , xinja makes more $ for this
  6. There is a massive difference between debit and credit
    The choice is really up to the consumer , if you want to press credit go for it you help xinja make money and they can then keep building the bank and providing more great products, if you don’t press credit that’s ok too , xinja won’t love you any less but your local retailer might love you more

Was this when inserting the card or via paywave?

I believe Aldi charge for paywave transactions, but wasn’t aware they did so for credit/MC?

eftpos is a set fee rather than a percentage, so yes is more attractive for banks to use debit.
However this is only one of the reasons that banks have been pushing debit.
debit cards also allow a greater ability for them to monitor your transactions in real time.
some people appreciate this, however in a world where everything people do is becoming more and more scrutinized and monitored, will drive people to cash.
I myself if i use credit, i use a credit card.
So many people have been brainwashed into the idea of the security of spending their own money. Banks love it, the interchange fees without the risk. You have way more consumer protections using a credit card than a debit card, since a credit card is the banks money not yours.
If one really wanted to use the eftpos system, it should be simple as inserting your card and overriding it with selecting cheque or savings. If that doesn’t work, ask to take out cash while doing the transaction.


AFAIK, at Aldi they charge for using credit. Most certainly they have their terminals set to route paywave transactions automatically through MC/Visa, so any paywave transaction would incur fees. Even if I use pin&chip, because Xinja doesn’t offer eftpos, it would have incur the same fee.

To quote the ACCC’s Credit, debit & prepaid card surcharges page, “Businesses are banned from charging excessive payment surcharges on credit, debit and prepaid card payments”.

and… “The purpose of the ban is to stop businesses from charging payment surcharges that are excessive. That is, from charging a customer more than what it costs the business to process the payment.”

Furthermore, “Credit cards usually have a higher cost for businesses, and may cost the business up to 1-1.5 per cent for Visa and MasterCard, and between 1.5-2 per cent for an American Express card payment.”

This is it. This is why I want to be able to use eftpos. Because currently, I have no recourse if a merchant decides to pass the cost on to me.

If neobanks are to drive clients away from the majors and offer a true alternative that empowers people, we need to make sure that use our lower operating costs to ensure we compete hard in the way the majors do not. Otherwise, MNC banks like ING will continue to be the more attractive option.

sauce: https://www.accc.gov.au/consumers/prices-surcharges-receipts/credit-debit-prepaid-card-surcharges


an fyi, there is a $3 surcharge to use this card at nab atms…again, cause its recognised as a credit card, not a debit card

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I got a 2.50 surge charge at a bendigo atm :tired_face:

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I would think the solution here is to automatically refund all ATM fees and charges. Other card providers are already doing this.

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naah, solution is to get the bank identification number fixed.
me thinks there is a ploy going on here to collect fees.

Hi @Camylopez, @adamtimol, @nickelslol - yes it’s the AusPaynet (Australian Payments Network) issue (not a credit vs savings issue). They only update their lists quarterly and banks that use this list and no other information do not recognise Xinja as an Australian bank. We’re the first retail bank to launch with new payment rails in a very long time hence the problem. Obviously, Xinja is not charging these fees but the other banks are. ANZ and CBA are NOT charging them incidentally. We are working on a solution as AusPaynet is not due to update their lists until February. We’ll get back to this forum with an update…and we will be talking to the banks directly.


Hi again,

Sorry I’ve been so long responding! A few points to clarify:

  • You’re quite right about fees @Karen - I should have said “Xinja will not charge you any fees for choosing Credit”

  • Surcharging the cost of card acceptance has recently been regulated (as per @adamtimol’s first post), however the way merchants are charged by their banks and the way they pass that cost on to customers is still inconsistent and confusing.

  • It used to be that Visa/Mastercard credit cards were more expensive to accept, but now usually Visa/Mastercard credit and debit card cost about the same for merchants to accept. Amex remains more expensive.

  • It is true that Xinja makes a tiny percentage per Mastercard transaction (this interchange revenue is regulated by the RBA), however the fees that we pay for the service basically net this out, so we actually make no money on debit card transactions.

The idea behind doing Mastercard only was not to charge customers more, or to make any money out of the system - it was simply to get a working bank account and a globally accepted card to our customers quickly.

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When you say first to launch with new payment rails what do you mean ? I imagined you would be using Indue, ASL, First data or Cuscal - all existing payments providers ?

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Hi @T_Armer - sorry for being slow to respond. It isn’t that we’re building with “new payment rails” (as @xinjareader has corrected me) so much as we’re the first new bank entrant to existing payment rails (ASL in our case) in a long time (other new entrants technically aren’t, since they just plugged into existing participants in the network).

The fact that we’re the first new entrant in so long means that we’re uncovering certain legacy processes in the industry – like having to register your BIN with AusPaynet as “domestic” so that ATMs don’t charge fees as though our BIN is international which is how we’re being viewed by NAB and Westpac for example.

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So at some point next year, are there plans to be able to select savings at eftpos terminals? I understand that it’s a matter of regulations etc, it’s just that there are a number of merchants who still charge higher surcharges when they detect a credit transaction.

I’m in no rush, I’d just like to know if there is a rough timeline.

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Hi @David_Langham
I’m new here in Xinja town but am working on getting an answer to your question. Hold tight and I’ll aim to get back to you soon.

Hello again @David_Langham
I’ve spoken to @xinjareader, and eftpos is a tricky one for us. The cost to implement is significant and not something we want to have to pass on to customers. Even if we did add these payment rails, we’d still have limited control over what individual merchants charge so the benefit to you wouldn’t always be realised.
Where we’d rather put our energy is to agitate and lobby for consistent reform in the payments fee space. The need to charge these sorts of fees (all together) should be challenged at an industry level. Thanks for the question and watch this space.

I’m actually really happy with this response. I joined Xinja, not because I’m expecting all the latest and greatest features, I just want a bank that explains their decision making process.

So I respect the fact that you didn’t sugar coat it and say maybe one day in the future. You just straight out said it’s too expensive and we don’t want to pass that cost along. For now I guess the best option is to use cash for merchants that charge extra for credit and just wait and see what regulation can pop up, and how fees change, in the future.

Speaking of explanations, I was reading one of the above comments and I’d really like to know more about ‘payment rails’ and who are Indue, ASL, First Data & Cuscal? I only learned about Cuscal the other day when I found out they are behind 86400, one of the other neobanks. Also what is AusPayNet?