"Now it is 70 per cent on card, which I am pleased about," Leung says. Staff at Plantation Coffee at work. His experience with contactless card payment is not unique. After it was introduced in Australia in 2007, the uptake by consumers has been swift. Research by Square released on Monday shows contactless technology is now the preferred method of payment in Australia, with 51 per cent of consumers using it. A survey by Square of 1044 consumers and 400 small to medium business owners and managers around Australia found the use of tap technology is more popular than cash, which is used by 24 per cent of respondents, or inserting a credit or debit card with a chip and entering a pin, which is used by 22 per cent.

Mobile wallets, such as Apple Pay, are still at the early adopter stage, with only 2 per cent preferring this method. High cost of convenience However, many small businesses are bearing the brunt of consumers' love for tap and go. The Australian Retailers Association estimates contactless payments using MasterCard's PayPass and rival Visa's PayWave cost businesses an extra $500 million a year. Debbie Smith from the Master Grocers Association says "the cost burden is enormous to small business".

Ms Smith said she resisted introducing PayWave in her own store as she was worried about the cost. "Our biggest issue is least cost routing through the Eftpos provider," she said. "Our PayWave transactions in any retail shop have doubled." Least cost routing is the choice for retailers to send payments via the cheapest network. ABA chief Anna Bligh said banks are working towards a low cost payment route. Credit:Alex Ellinghausen 'Squarely on the agenda' At the recent Vodafone National Small Business Summit, Ms Smith asked Anna Bligh, head of the Australian Bankers Association, why banks are not using Eftpos, the least cost routing, to reduce the burden on small business.

"NAB is trialling it in at least 40 stores," she said. "All the big banks are resisting it. What's the go?" Ms Bligh said the move to least cost routing required a technology investment by the banks. "I think it would be fair for banks to be characterised as having resisted it when this issue was first raised with them, partly because anything that changes is an investment in technology on their behalf," she told the summit. "The Reserve Bank has now put the issue very squarely on the agenda of the payments council, the payments council is made up of the card providers, banks and the Australian payments network and every bank has given a commitment to move to least cost routing." Ms Bligh said there was no "absolute deadline" on when the move to least cost routing would happen. "I can tell you the RBA has issued a statement that was very clear that if banks don’t move at sufficient rate on this then they will be issuing a consultation paper on regulating," she said. "That has kind of focused everyone's attention. I have met personally with the governor of the RBA on this and he is very firm on this."

Fairfax Media contacted the major banks on when least cost routing would be available. NAB has finished its pilot and expects to roll out least cost routing by the end of the year, Commonwealth Bank's roll out will not be complete until the end of financial year 2019, Westpac will deliver low cost routing "at some time" in 2019 and a spokesperson for ANZ said its program was still in the pilot phase and it was unable to provide a timeframe for when it will be available. Square country manager Ben Pfisterer. Credit:Peter Braig Cost of cash While there is a cost to accepting cards, Square's research also highlights the cost of cash to small business.

The research found Australian small and medium sized businesses waste an average of 216 hours (about 29 working days) each year counting and banking cash. "We wanted to debunk the myth that there is no cost to accepting cash," Square’s Australian country manager, Ben Pfisterer, said. Square charges a flat fee rather than an extra fee for contactless payments but Leung says merchant costs are just a cost of doing business. "There is a cost of cash, too, but it is just not clearly defined, like having a staff member spend an hour to go and bank coins," he says. "I want them to concentrate on making the best coffee they can instead of worrying about change and floats; it is such a game-changer." Follow MySmallBusiness on Twitter, Facebook and LinkedIn.