Retail payments system

We are working to ensure that retail payment systems operate in the interests of New Zealand consumers and businesses.

About retail payment systems

The retail payments system facilitates the transfer of funds from consumers to merchants in exchange for goods and services. The retail payments system is constantly evolving and comprises of various retail payment methods like card products, cheques, cash, bank transfers and more recently, Buy-Now, Pay-Later products.

Card payments are the most common payment method in New Zealand and comprise of debit (including EFTPOS) and credit card payment products. Unlike the cash payments, the card payment system is complex web of technical infrastructure, arrangements and standards involving a number of intermediaries. As a result, the cost of accepting card payments has become a significant overhead for merchants.

Since 2016, the Ministry of Business, Innovation and Employment (MBIE) has been working with the payments and banking industry to:

  • ensure that New Zealand’s existing the system is operating in the interests of New Zealand consumers and businesses
  • facilitate new ways of making payments, and allow consumers to securely share their banking data with trusted third-parties, including through the Payments New Zealand-led API Centre(external link). (such initiatives are commonly referred to as ‘open banking’).

Read more about the development of a consumer data right to support open banking initiatives in New Zealand

Government policy decisions

The Government has signalled its commitment to making regulations to reduce merchant service fees in New Zealand. On 19 April 2021, Cabinet agreed to establish a new regulatory regime to:

  • Require reductions in interchange fees as soon as possible
  • Enable direct intervention by the Commerce Commission using a broad suite of powers to regulate different participants, or classes of participants, in the retail payment system. This will ensure the regime is flexible and durable to oversee retail payments for the foreseeable future; and
  • Introduce a disclosure and reporting requirement to enable the Commerce Commission to monitor the retail payments system.

Additional policy approvals on retail payment system

On 30 June 2021 Cabinet Economic Development Committee (DEV) agreed to:

  • additional regulatory tools and enforcement powers for the Commerce Commission as the regulator.
  • The specific objective of the regime be to ensure that the retail payments system delivers long-term benefits to merchants and consumers through efficient retail payment networks and competition in the supply of retail payment services.
  • The Commerce Commission will have the ability to issue standards that may cover pricing, access and information disclosure arrangements, and may issue directions around network rules.
  • The Commerce Commission will also have monitoring, enforcement and general powers.

If you have any questions about the review, or the consultation process, please contact

Further information

In December 2020, MBIE released a discussion paper exploring issues and options for regulating merchant service fees.

The issues paper called for public submissions by 19 February 2021. We received 30 submissions representing academics, banks, card schemes, consumer representatives, merchants, non-bank acquirers, payment infrastructure providers and other industry participants.

View the submissions to the discussion paper(external link)

Submitters who wished to remain anonymous are referred to as ‘anonymous submitter’. Redactions have been made in accordance with the Official Information Act 1982 and the Privacy Act 1993 and when content may be commercially sensitive. Two submitters requested for their submissions to remain confidential. These submissions have not been published.

In April 2018 Payments New Zealand updated the Minister of Commerce and Consumer Affairs on the work the industry is undertaking in response to Hon Jacqui Dean’s letter of August 2017.

Letter from Payments New Zealand to Hon Kris Faafoi [PDF, 305 KB] 

Hon Kris Faafoi’s response to Payments New Zealand [PDF, 99 KB]

The then Minister of Commerce and Consumer Affairs, Hon Jacqui Dean, wrote to Payments New Zealand, the industry body for payments.

Hon Jacqui Dean’s update to Cabinet on retail payment systems [PDF, 146 KB] 

Hon Jacqui Dean’s letter to Payments New Zealand [PDF, 61 KB] 

2016 consultation on retail payments system

In February 2016, the Government asked MBIE to examine whether New Zealand’s retail payment systems — as they operate at present and as they may develop in the future — are producing good economic outcomes.

We released an Issues paper addressing these questions in October 2016.

Retail payment systems in New Zealand — Issues Paper [PDF, 1.1 MB] 

View the submissions on the Issues Paper

Last updated: 15 June 2021