A Bill to help lower the fees charged when credit and debit transactions are made, will save New Zealand businesses
around $74 million a year.
The Retail Payment System Bill passed its third reading today, regulating merchant service fees, and reducing a major
overhead for small business, Commerce and Consumer Affairs Minister David Clark said.
“This Bill will help lower the fees charged when credit and debit transactions are made, and will save New Zealand
businesses around $74 million a year,” David Clark said.
“We made a campaign promise in 2020 to reduce merchant fees, and today we deliver on that commitment. It’s unfair that
retailers, especially small retailers, are constantly stung with high fees for offering a service they need to survive.
“It’s important we see merchants benefit from lower fees as soon as possible. As those overheads drop, I’d expect
consumers to benefit from savings.
“Before the COVID-19 pandemic, Eftpos, which is a fees-free method of payment, was the main way New Zealanders would pay
for goods and services. However customers are now favouring contactless debit, credit and online payments more and more,
and it is vital that retailers are able to keep up with their customers’ needs,” David Clark said.The Retail Payment System Bill, will address merchant service fees by:setting limits on interchange fees – the largest component of merchant service feesenabling the Commerce Commission to monitor the retail payment system and directly intervene to regulate designated
networksempowering the Commerce Commission to ensure any surcharging by merchants is reasonable.
“One of the main components of merchant service fees is the interchange fee. We will cap those for credit card
transactions at 0.8 %, which is in line with Australia,” David Clark said.
“We’re also capping the interchange fees charged for online debit card transactions at 0.6 %. Contactless debit card
interchange fees will stay at their current levels of 0.2 % or less, and for swiped and inserted debit there will be no
“This will have an impact on both Mastercard and Visa and will come into effect six months after enactment. This is the
quickest it can be done and is swifter than when similar changes were made in Australia,” David Clark said
For more information on the new regulatory regime, visit the Ministry of Business, Innovation and Employment’s website.