The Government has welcomed the Commerce Commission’s plan to reduce card fees for Kiwis by an estimated NZD 260 million a year.
Interchange fees are the fees that banks charge to process Visa and Mastercard payments. The Commerce Commission estimated that New Zealand businesses incurred approximately NZD 1 billion each year in fees to accept Visa and Mastercard payments from their customers.
“The Government is relentlessly focused on reducing the cost of living, so Kiwis can keep more of their hard-earned income and live a higher quality of life," said Commerce and Consumer Affairs Minister Andrew Bayly.
He added that credit and debit card fees have been a pain for consumers and that nobody appreciated being hit by a big surcharge or payWave fee at the checkout.
“It’s hard for Kiwis to know what fees are reasonable and fair, and even a few cents on a transaction can add up over time.”
Bayly was delighted that the Commission had released a draft decision to reduce and standardise interchange fees, including the fees businesses incurred when accepting Visa and Mastercard card payments.
“Once implemented, Kiwis can expect to pay lower and more consistent fees at the checkout. Right now, retailers pay, on average, 1.5 percent to process a card transaction. The Commission’s proposal reduces this to around 0.7 per cent.”
The Retail Payment System Act stipulated that businesses must only charge customers the cost of processing a payment, meaning businesses must pass this saving on to consumers.
“This news is an important win for Kiwi businesses and consumers who the Commission estimates will save about NZD 260 million per year in card fees.”
He added that he had expressed the urgency of lowering card fees to the Commission and expected the Commission to introduce a cap on total surcharge fees. He also expected the Commission to arrive at a comprehensive solution for interchange and surcharge fees by mid-2025 and implement it as soon as practicable.
