Lower card fees could bring prices down
New laws will see businesses paying less to banks for accepting some card types.
Businesses will soon be paying lower fees to their banks for accepting credit and contactless debit card payments. The fees – known as merchant service fees – will be regulated under the new Retail Payment System Act, which will limit how much banks can charge businesses.
Merchant services fees aren’t charged when eftpos is used or when a debit card is swiped or inserted. The fees kick in when customers use credit and contactless debit cards – both of which have increased in popularity since the Covid-19 pandemic began, Commerce and Consumer Affairs Minister David Clark said.
He expects New Zealand businesses to save around $74 million a year once the fee limits kick in, on 13 November 2022. He also expects consumers to benefit from savings as business overheads drop.
Consumer NZ chief executive Jon Duffy said he was pleased the legislation had finally been enacted as fees had been significantly higher here than in Australia.
“Merchant service fees increase costs for businesses and ultimately result in higher prices for consumers, while lining the pockets of the banks and credit card companies,” Duffy said.
The act also gives the Commerce Commission the power to ensure any surcharges set by retailers, to recover the cost of merchant service fees, are reasonable.
“We receive regular complaints about exorbitant surcharges so we’re happy to see the Commerce Commission will be keeping an eye on this. Some retailers charge consumers a lot more than the cost to them of accepting the payment. This clearly needs to change,” Duffy said.