Until now choosing to "tap and go" at the checkout has been free — or so you thought, right?

Contactless card payments are expensive for businesses to process and some retailers are now opting to put that cost back on customers.

Dr Michael Schaper, deputy chair of the Australian Competition and Consumer Commission (ACCC), said consumers "hooked" on the technology often had no idea about the underlying processing costs.

"For most businesses there is a fee they're charged through their bank or their card operator," he said.

"If you do tap and get hit with an extra charge, it is legal."

Businesses can already pass on a 1 to 2 per cent surcharge on normal credit card transactions, but the fee charged by banks to process debit and eftpos purchases is much lower.

The Reserve Bank's 2016 Consumer Payments Survey showed more Australians used debit cards than credit cards for this reason.

"It really does require customers to make sure when they buy something they ask that question," Dr Schaper said.

"I think too many of us probably don't because we assume we're not going to be charged for it."

Dr Schaper said some businesses would be absorbing the higher fees by passing on the cost to consumers in other ways.

"If you're buying a cup of coffee [for] $3.50 and you're getting charged another nine or 10 cents for a fee, that might be one way," he said.

"The next shop down the road might be charging $3.60 and they don't really bother about trying to work [fees] out because they've covered it effectively through their basic costs."

Retailers' bottom lines stretched

The Australian Retailers Association estimates tap and go costs merchants an extra $500 million a year.

Executive director Russell Zimmerman said recent changes to the way banks charged retailers to process credit card transactions had put even more pressure on retailers' bottom lines.

"This has happened by stealth and retailers didn't realise what was happening when they were asked to sign on to tap and go," he said.

Mr Zimmerman said Westpac, ANZ and NAB had announced plans to give retailers the option to process tap-and-go payments through less expensive routes and expected other banks to follow suit.

In the meantime, he said you might see more businesses asking you to pay a small fee to use contactless payments at the checkout.

What do businesses have to tell me about card fees?

If they've absorbed it, you won't really know.

However, Dr Schaper said businesses that added a surcharge at the checkout had to disclose it clearly and couldn't charge you more than it cost them to process the transaction with their bank.

"It can be a bit of a trap here both for consumers and for businesses," he said.

"For consumers, it's to make sure they're aware of the fee; and for businesses it's to remember they can't charge more than the fee."

If you notice your local coffee shop or newsagency charging a flat fee for every card payment, that should ring some alarm bells.

Laws were introduced last year to crack down on retailers charging excessive fees for credit, debit and eftpos transactions.

"Almost all of us have seen retailers say if you want to use eftpos, credit card or debit there's an extra 20, 30 or 50-cent charge," he said.

"In many cases it's actually an overstatement, so they run a bit of a risk there."

Dr Shaper said the ACCC had already issued an infringement notice to a retailer for breaching the legislation and was investigating other complaints from consumers.

This is what you can be charged. ( Supplied: Australian Competition and Consumer Commission )

So how can I avoid paying extra?

Choose a different payment method.

At the moment there's no way for customers to specify how their tap-and-go purchase is classified.

The only way to get around this is to use cash or go back to swiping your card, punching in your pin and selecting cheque or savings.

Dr Schaper said consumers who suspected a business's fees or surcharges were higher than they should be should complain to the ACCC.

"People can come to us and complain, but I think the very first thing would be ask the business operator themselves," he said.

"They may actually have higher costs than you realise."

Editor's note: This story originally quoted Dr Schaper as saying all paywave transactions were processed through the credit card system by default. This is incorrect. The ACCC and the ABC now understand debit card transactions are processed through the debit system.