Regulating to reduce merchant service fees

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Submissions due: 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.

How to make a submission

The Ministry of Business, Innovation and Employment (MBIE) seeks written submissions on the issues raised in this document by 10 am on 19 February 2021.

Your submission may respond to any or all of these issues. Where possible, please include evidence to support your views, for example references to independent research, facts and figures, or relevant examples.

Please use the relevant submission template (above). This will help us to collate submissions and ensure that your views are fully considered. Please also include your name and (if applicable) the name of your organisation in your submission.

Please include your contact details in the cover letter or e-mail accompanying your submission.

You can make your submission by:

  • sending your submission as a Microsoft Word document to
  • mailing your submission to:
    Competition & Consumer Policy Team
    Building, Resources and Markets
    Ministry of Business, Innovation & Employment
    PO Box 1473
    Wellington 6140
    New Zealand

Please direct any questions that you have in relation to the submissions process to the Team by also emailing: