Summarised by Centrist
Business groups are urging the government to drop its proposed blanket ban on payment surcharges and instead introduce capped fees for debit and credit card transactions.
Under the Retail Payment System Amendment Bill, merchants would no longer be permitted to add surcharges for in-store EFTPOS, Visa or Mastercard payments. Currently, businesses can apply surcharges to recover the cost of accepting certain payment types.
The groups argue a ban would shift costs onto every customer, including those using low-cost methods such as EFTPOS. They propose capping surcharges at 0.5 percent for debit cards and 1 percent for personal domestic credit cards.
Retail NZ chief executive Carolyn Young said a blanket prohibition was “a blunt tool that will damage both consumers and businesses”. She said removing the ability to recover legitimate processing costs would “force retailers to increase prices across the board”.
Auckland Business Chamber chief executive Simon Bridges supported the alternative proposal, saying caps provided a practical balance.
“Our members are strongly opposed to a ban because it pushes costs onto all customers in non-transparent ways,” he said.
“Reasonable caps protect consumers, provide certainty and avoid the unintended mess a blanket prohibition would create.”
The Finance and Expenditure Committee recently reported on the bill, noting that merchant surcharges generally range from 0.7 to 2 percent.
It cited Commerce Commission estimates that consumers pay up to $150 million a year in surcharges, of which $45 million to $65 million may exceed reasonable merchant costs. The majority of the committee recommended passing the bill.
The ban’s critics say interchange fee caps due to take effect on 1 December will already lower costs for merchants, and that capped surcharges would complement these changes.
They have called on ministers to work with industry on a compromise rather than proceeding with a full ban.
