Regulating to reduce merchant service fees

Submissions closed: 19 February 2021, 10am

The Ministry of Business, Innovation and Employment is seeking submissions on options to reduce merchant service fees. The outcome of this consultation will be used to advise the Government on the approach to regulating merchant service fees.

What are merchant service fees?

Banks charge retailers a merchant service fee when a customer uses a credit or debit card (contactless or online) to make a payment.

EFTPOS is essentially fee-free for retailers. However, while the use of contactless debit and online transactions is increasing, use of EFTPOS is declining. This means retailers have to absorb higher fees to accept these payment methods.

What are you seeking feedback on?

Banks in New Zealand charge higher merchant service fees for card payments than other countries. This is a cost of doing business that generally gets passed onto customers.

The Government is looking at regulating the interchange fee component of merchant service fees by introducing hard caps. These caps may be supplemented by other measures including:

  • 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.

We would like to hear your thoughts on the regulation of merchant service fees in New Zealand. If you have any questions about the discussion paper, or the consultation process, please contact

Find out more about the retail payment systems.

Release of information

MBIE intends to upload copies of submissions received to MBIE’s website at MBIE will consider you to have consented to uploading by making a submission, unless you clearly specify otherwise in your submission.

If your submission contains any information that is confidential or you otherwise wish us not to publish, please:

  • indicate this on the front of the submission, with any confidential information clearly marked within the text; and
  • provide a separate version excluding the relevant information for publication on our website.

Submissions remain subject to request under the Official Information Act 1982. Please set out clearly in the cover letter or e-mail accompanying your submission if you have any objection to the release of any information in the submission, and in particular, which parts you consider should be withheld, together with the reasons for withholding the information. MBIE will take such objections into account and will consult with submitters when responding to requests under the Official Information Act 1982.

Private information

The Privacy Act 1993 establishes certain principles with respect to the collection, use and disclosure of information about individuals by various agencies, including MBIE. Any personal information you supply to MBIE in the course of making a submission will only be used for the purpose of assisting in the development of policy advice in relation to this review. Please clearly indicate in the cover letter or e-mail accompanying your submission if you do not wish your name, or any other personal information, to be included in any summary of submissions that MBIE may publish.