21may credit card fees reined in hero
News
12 May 2021

Credit card fees to be reined in

New rules to clamp down on fees for paying by credit card.

Fees passed on to consumers who pay by credit or debit card are expected to fall next year, with rules finally on the way to cap charges.

Commerce and Consumer Affairs Minister David Clark has announced the government will regulate merchant service fees.

These fees are charged by banks to businesses when customers use a credit or debit card to pay for products. They’re ultimately passed on to consumers at the checkout.

We’ve been calling for a clampdown on card fees, which are significantly higher here than in Australia.

Card fees generate revenue for banks and credit card companies but increase the cost of doing business for merchants and result in higher prices for consumers.

Lack of transparency about these fees also makes it difficult for consumers to pick the cheapest payment option.

A Retail Payments Systems Bill, to be introduced this year, will cap interchange fees, which are one of the main components of merchant service fees.

Interchange fees will be restricted to:

  • 0.8% for credit card transactions
  • 0.6% for online debit card payments
  • 0.2% for contactless debit card payments.

For swiped and inserted debit card payments, there will be no interchange fee.

The government estimates the changes could save businesses $74 million annually.

The Commerce Commission will be responsible for monitoring fees and will have the power to take enforcement action against companies that fail to comply.

The rules are expected to come into effect next year.

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Member comments

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John M.
16 May 2021
Is anything done about the rip-off by airlines?

The worst organisation at ripping the consumer off is the airlines who charge a fee PER seat rather than per transaction! This needs to be addressed. It is all very well forcing limits on what the credit card companies can charge, but unless there is also legislation forbidding a mark-up on that fee being passed on to the consumer, consumers wont always benefit.

Alice
15 May 2021
Lower prices for consumers

Looking forward to prices falling after these fees to merchants are reduced. Wait... I just saw a pig flying past the window!

Ray M.
15 May 2021
Why the differences?

Why different rates for different types of debit card transactions? I'd prefer that they forced companies to charge no more than actual cost and to provide one way of avoiding them, like Poli.

John Boyes
15 May 2021
Card Charges

Why is there no discount for paying cash? Maybe it's too "old hat" for the current generation but hey! it's the price the seller is asking. All this card use is at a cost so pay for it on the price of goods but give an incentive for cash. This should apply to all those charges that insist payment by card by both business and government.

MH
22 May 2021
Banks charge Retailers a price for counting cash too.

Hard to win, so this seems like good progress.

MH
22 May 2021
Banks charge Retailers a price for counting cash too.

Hard to win, so this seems like good progress.

MH
22 May 2021
Banks charge Retailers a price for counting cash too.

Hard to win, so this seems like good progress.

Jean H.
15 May 2021
Co op Taxis

Will this also apply to Taxi companies who charge an extra $2.50 if you use your Visa credit or EFTPOS cards to pay their fares?

I recently tried to pay a fare using a $20.00 note. No, luck. The driver didn't have any cash in his cab.

Dwayne B.
12 May 2021
PB Tech will finally have to stop ripping-off customers with 2% charges

So glad this is being addressed.

PB Tech has been the worst in this regard, charging 2% on top of retail prices to those who pay by card. Absolutely outrageous.

Paul W
15 May 2021
Sure hope so

And don't forget hotels who do the same..

Ray M.
15 May 2021
Just use Poli

I shop at PB and never pay the fee as I just pay by Poli. It's been your choice to pay.