The Government has announced it is extending its surcharge ban to foreign-issued cards and commercial cards in an effort to make life easier for businesses and consumers.
The Retail Payment System (Ban on Merchant Surcharges) Amendment Bill passed its first reading last night. The Bill prohibits surcharges on all in-store EFTPOS, Visa and Mastercard payments.
“Including foreign cards is easier for everyone. A comprehensive ban means businesses don’t have to second-guess what’s in or out, and consumers won’t get stung by surprise add-ons at the checkout,” said Commerce and Consumer Affairs Minister, Scott Simpson.
“International visitors from our big inbound tourism markets like the United Kingdom and Europe, where surcharges are long gone, won’t feel like they’ve stepped back in time or they are being ripped off.
“I want consumers to enjoy the benefits as early as possible, so the Bill proposes a one-month implementation period once it has been passed. The ban will be in place by May 2026, or sooner if possible.”
Interchange fees make up approximately 60% of merchant service fees. The Commerce Commission has decided to cut these fees from 1 December for cards that are already regulated and 1 May 2026 for cards that will become subject to caps for the first time – foreign-issued cards.
“By the time the ban is in full swing, the savings from the Commerce Commission’s latest cut to banking fees will benefit businesses, with expected savings of up to $90 million a year. That’s on top of the earlier savings of $140m from caps set in 2022,” said Minister Simpson.
“The ban means Kiwi shoppers will no longer be confronted at payment terminals by a pesky sticker and surprise, sometimes excessive, costs.”
The Retail Payment System (Ban on Merchant Surcharges) Amendment Bill will go to the Finance and Expenditure Committee.
Online transactions and payments through networks other than Visa, Mastercard and EFTPOS are excluded from the surcharging ban.
