Where Your $5 Coffee Payment Actually Goes (And How to Fix It)

#fintech #payments #web3 #startup

You tap your card. The barista makes your coffee. Simple transaction, right?

Not quite. Here's what actually happens behind that tap.

The Journey of Your $5

When you pay $5 for a coffee using your Visa or Mastercard:

Your bank (the issuer) authorizes the transaction and collects an interchange fee (0.3-0.8%)
Visa or Mastercard routes the transaction and collects a scheme fee (~0.05%)
The cafe's bank (the acquirer) processes the payment and takes a margin
The payment processor (like Tyro, Square, or Stripe) takes their cut
The terminal provider charges a rental or per-transaction fee

By the time the cafe gets paid, 2-3 business days later, they've lost roughly $0.015-$0.04 of your $5.

Doesn't sound like much? Across all of Australia's card payments, that's $1.6 billion a year going to intermediaries.

The Surcharge Ban Doesn't Fix This

Australia's RBA just banned card surcharges (effective October 2026). Consumers won't see that 1.5% line item anymore.

But the 0.3-0.8% processing cost per tap doesn't disappear. It gets absorbed into higher prices, reduced rewards, or increased bank fees.

The RBA itself estimates a one-off 0.1% price increase across the board.

What If the Cafe Kept the Full $5?

OpenPasskey built a payment card that works at any terminal. Same tap. Same experience. But no intermediaries.

How?

Own card identifier from ISO (the same system Visa uses)
EMV contactless standard (works at every terminal)
Settlement in seconds (not 2-3 days)
No interchange, no scheme fees, no acquirer margin

The cafe gets $5. Not $4.96.

The Scale

3,200+ users across 20+ Sydney cafes are already using this system. Built by three people in ten months with zero external funding. Recently selected for Blackbird Ventures' Giants Cohort 11.