Consumers and businesses to benefit from lower payment processing fees

Published: 12 May 2022

A new regulatory regime for New Zealand’s retail payment system will reduce costs and deliver long-term benefits to businesses and consumers.

The Retail Payment System Bill, which passed its third reading in Parliament, will establish new measures for regulating the retail payment system to improve efficiency, competition and innovation. It will do this by:

  • setting limits on interchange fees – the largest component of merchant service fees – in VISA and Mastercard networks
  • enabling the Commerce Commission to monitor the retail payment system and directly intervene to regulate designated networks
  • empowering the Commerce Commission to ensure any surcharging by merchants is reasonable.

Retail payments are a vital factor underpinning any market economy, and the new measures will enable retailers to transact with consumers without undue financial cost. This includes online and contactless payments which have risen in use due to the COVID-19 pandemic.

The Commerce Commission’s new powers come into effect immediately after enactment of this Bill, so the Commission can start playing its monitoring and regulatory role immediately.

Price regulation by way of the initial pricing standard comes into effect after 6 months and will apply to Mastercard and Visa networks.

This initial pricing standard could save merchants in New Zealand approximately $74 million annually and will particularly benefit smaller retailers or those relying on credit or online sales.

Read more about the retail payment system 

Read the Minister’s press release:

Lower card fees on way for business, consumers(external link) —

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