The Retail Payment System (Ban on Merchant Surcharges) Amendment Bill was introduced last year with the intention of eliminating paywave and credit card surcharges by May 2026. The proposal aimed to remove the additional fees often added to card transactions, a move driven by rising public frustration over transparency and cost.
However, recent comments from Prime Minister Christopher Luxon suggest the government is reassessing the policy. He indicated the coalition is taking time to better understand the broader implications before making a final decision.
Auckland Business Chamber chief executive Simon Bridges said the proposed blanket ban created serious concerns for small and medium-sized enterprises. According to Bridges, businesses felt caught between major banks, payment providers, global card companies and consumer expectations, while also navigating political pressure.
He noted that chambers across the country strongly opposed the bill during submissions, warning that unintended consequences could outweigh the intended consumer benefits. Bridges also referenced developments in Australia, where a similar approach was reconsidered after complications emerged.
Retail industry representatives have echoed those concerns. The Retail NZ argues that in the current economic climate, even a one to two per cent cost increase can have a meaningful impact on margins. With many retailers already facing recessionary pressures, absorbing transaction fees without the ability to surcharge could force price increases elsewhere.
Retail NZ chief executive Carolyn Young said pausing the policy would allow the Commerce Commission to continue consultation and ensure a more balanced outcome.
On the other side of the debate, Consumer NZ is urging the government to proceed with the ban. The organisation maintains that surcharges are often poorly disclosed and disproportionately affect consumers who lack no-fee alternatives.
Consumer NZ points to estimates that New Zealanders collectively pay up to $150 million annually in surcharges, including a significant portion considered excessive. The group also highlights recent reductions in card processing costs, arguing that businesses have already seen meaningful savings that could offset the removal of surcharges.
The bill remains on the parliamentary order paper awaiting its second reading, but coalition leaders have indicated it may not progress in its current form. New Zealand First leader Winston Peters suggested the proposal is unlikely to advance, while ACT leader David Seymour said the government is listening carefully to feedback from small business owners concerned about absorbing transaction costs.
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