The change will prohibit additional charges for transactions made using domestic Visa, Mastercard, and EFTPOS cards. The Government plans to introduce the Retail Payment System (Ban on Surcharges) Amendment Bill by the end of 2025. The ban will mark a major shift in the way payments are processed in the country.
Commerce and Consumer Affairs Minister, Scott Simpson, explained the decision aims to eliminate frustration of surprise fees for consumers. He highlighted the surcharge notices would become a thing of the past. The move is designed to offer consumers greater transparency and confidence when shopping.
Currently, New Zealanders are paying an estimated $150 million in surcharges annually, with $65 million of this being deemed excessive. This change follows the Commerce Commission’s recent actions to lower interchange fees, which businesses typically pass on to consumers through these surcharges. It is estimated that the reduction in interchange fees will save merchants about $90 million each year.
Industry groups have raised concerns about the impact on retailers. Steve Armitage, Chief Executive of Hospitality NZ, acknowledged the intention behind the change but pointed out the real costs associated with electronic payments. For many small businesses, particularly those in the hospitality sector, absorbing these costs without surcharges may not be financially viable. Armitage suggests that businesses will likely have to adjust their pricing structures to account for these new costs.
BusinessNZ has expressed support for the ban, describing it as a positive move for both consumers and businesses. Director of Advocacy, Catherine Beard, noted that the change aligns New Zealand with global trends, as many other countries have already moved to eliminate payment surcharges. She believes the new rules will create a smoother, more transparent shopping experience, where consumers will know exactly how much they’ll pay at the checkout.
The impact on small businesses will depend on how they adapt to the new regulations. Some may choose to absorb the extra costs, while others might adjust their prices or negotiate better rates with payment providers. Retailers and hospitality businesses will need to reassess their pricing and payment strategies to ensure they can continue to operate sustainably.
Overall, the surcharge ban will prompt a recalibration of payment practices across New Zealand, ensuring a more straightforward and transparent experience for shoppers. However, businesses, especially smaller ones, will need to carefully consider how to manage the financial implications of the change.
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