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 firstname.lastname@example.org
Find out more about the retail payment systems.
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