Surcharging bill passes first reading

The Bill puts in place the Government’s ban on surcharges and expands the scope to include all in-store EFTPOS, Visa and Mastercard payments. It is expected to be in effect by May 2026 if not earlier.

The move to ban surcharges follows the Commerce Commission’s decision to cut interchange fees. These make up 60% of the fees retailers are charged by payment providers, mainly banks, for accepting contactless and credit card transactions. Savings of up to $90 million from lower fees are expected to start flowing through to businesses from 1 December.

The Government’s goal is to improve consumers’ shopping experience and to make prices more transparent by doing away with last-minute hidden costs.

It is also aiming to resolve the issue of excessive surcharging – businesses charging more than is needed to cover costs. This accounts for up to $65 million of the $150 million that New Zealanders pay in surcharges each year.

The ban covers in-store transactions using all cards on the EFTPOS, Mastercard and Visa networks, whether personal or business, domestic or foreign, physical or digital. It also covers payments at all types of point-of-sale terminals, including unattended ones like parking meters. Online transactions will not be covered by the ban.

Read the Government’s announcement:

Bill to ban surcharges passes first reading(external link) — Beehive.govt.nz

The Retail Payment System (Ban on Merchant Surcharges) Amendment Bill has been referred to the Finance and Expenditure Committee. The NZ Parliament website will be updated when the Bill is open for public submissions.

Finance and Expenditure(external link) — New Zealand Parliament