Consultation opens on regulating merchant service fees

Published: 10 December 2020

The Ministry of Business, Innovation and Employment has opened consultation on options to reduce merchant service fees on debit and credit cards.

Banks charge retailers a merchant service fee when a customer uses a credit or debit card (contactless or online) to make a payment. These fees are higher in New Zealand than they are in other countries such as Australia.

While EFTPOS is essentially fees-free for retailers, its use is in decline as consumers are increasingly favouring contactless debit and online transactions. As a result, retailers are having to absorb higher merchant service fees. 


Interchange fees, which banks charge for credit and debit transactions, form a large part of a merchant service fee. The Government is considering regulating interchange fees by introducing a hard cap. Other potential measures include:

  • facilitating collective bargaining to support small businesses
  • codifying rules and practices around surcharging, bundling of merchant service fees, rewards and loyalty schemes
  • requiring banks to disclose specified information about merchant service fees to improve transparency.

Read the Issues Paper and have your say

Read the Beehive media release(external link)

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Phone: 027 442 2141