However, it will still cost merchants, who will need to absorb the cost or pass it onto customers by hiking prices.
Commerce and Consumer Affairs Minister Scott Simpson said the move would put money back in people’s pockets by scrapping the frustrating fees often added at the checkout.
“Surcharges are a hassle and an unwelcome surprise when shoppers get to the till. That pesky note or sticker on the payment machine will become a thing of the past,” Simpson said.
“We’re banning surcharges so consumers can shop with confidence knowing how much they will pay for their purchases.”
The new law will come into effect by May 2026 and apply to in-store payments made using domestic Mastercard, Visa debit and credit cards, and EFTPOS.
The Commerce Commission estimates New Zealanders pay up to $150 million in surcharges every year, including between $45 million and $65 million in excessive charges.
“Shoppers will no longer be penalised for their choice of payment method, whether that’s tapping, swiping or using their phone’s digital wallet,” Simpson said.
The announcement follows a Commerce Commission decision to reduce interchange fees paid by businesses to accept Visa and Mastercard payments, which is expected to save businesses around $90 million a year.
Simpson said while surcharges are intended to cover the cost of accepting cards, many retailers overcharge or fail to clearly display the fee.
“In some cases, the retailer doesn’t even make it clear what the percentage is,” he said. “A ban on surcharges means no more surprises for people who currently feel like they’re being charged to use their own hard-earned money.”
The Retail Payment System (Ban on Surcharges) Amendment Bill is expected to be introduced to Parliament before the end of the year.
Broadcaster Chris Lynch is an award winning journalist who also produces Christchurch news and video content for domestic and international companies. This article was originally published by Chris Lynch Media and is published here with kind permission.
“Surcharges are a hassle and an unwelcome surprise when shoppers get to the till. That pesky note or sticker on the payment machine will become a thing of the past,” Simpson said.
“We’re banning surcharges so consumers can shop with confidence knowing how much they will pay for their purchases.”
The new law will come into effect by May 2026 and apply to in-store payments made using domestic Mastercard, Visa debit and credit cards, and EFTPOS.
The Commerce Commission estimates New Zealanders pay up to $150 million in surcharges every year, including between $45 million and $65 million in excessive charges.
“Shoppers will no longer be penalised for their choice of payment method, whether that’s tapping, swiping or using their phone’s digital wallet,” Simpson said.
The announcement follows a Commerce Commission decision to reduce interchange fees paid by businesses to accept Visa and Mastercard payments, which is expected to save businesses around $90 million a year.
Simpson said while surcharges are intended to cover the cost of accepting cards, many retailers overcharge or fail to clearly display the fee.
“In some cases, the retailer doesn’t even make it clear what the percentage is,” he said. “A ban on surcharges means no more surprises for people who currently feel like they’re being charged to use their own hard-earned money.”
The Retail Payment System (Ban on Surcharges) Amendment Bill is expected to be introduced to Parliament before the end of the year.
Broadcaster Chris Lynch is an award winning journalist who also produces Christchurch news and video content for domestic and international companies. This article was originally published by Chris Lynch Media and is published here with kind permission.
2 comments:
So who will swallow this 150 million dollar sum. The banks? Oh my, they are more likely to increase it. The businesses? Not likely is is. After all, they brought it in to give the customer a choice. Just tap and pay extra. Swipe, enter pin and pay less. So they are getting punished for offering clients choices, so they won't pay it.
So who's left, oh yeah the customer. The government is going to take away their option of paying less, so they will pay for it all.
Go Luxon, sticking it to the poor yet again.
And about time too. Merchant card fees are an overhead cost of doing business. They are the price the merchant pays for a guaranteed cash flow and transferring the risk of bad debts to the credit card operator. And yet they have the nerve to call the surcharges a "convenience fee" for the customer. Customers wouldn't pay a seperate cash handling fee to cover the extra costs of paying with notes and coins. Nor would they stand for paying fees designed to recover other overhead costs, like the power used to turn the lights on, even if it were more convenient for them to see what's on offer. All those costs are a cost of doing business and recovered in prices. So why should the custmer have to reimburse the merchants' card fees.
I trust the next target will be those insidious surcharges piled on by cafes for the privilege of buying your flat white on the weekend.
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