The government's ban on credit and debit card surcharges looks increasingly uncertain, but a separate Commerce Commission intervention has already more than halved the interchange fees retailers pay — and that saving is flowing through.
The government's much-trailed ban on credit and debit card surcharges appears increasingly uncertain, but consumers may already be receiving much of the intended benefit through a separate regulatory intervention.
Finance Minister Nicola Willis confirmed this week that banning PayWave surcharges remains the government's intention, despite coalition partner ACT pulling its support for the legislation. The ban was originally promised to be in place by May this year.
The policy hit an impasse in February after small businesses raised concerns about their ability to absorb the costs of running card payment systems without being able to surcharge for them. Commerce and Consumer Affairs Minister Cameron Brewer is still working through the issues raised, Willis said.
The real win may already be happening
Even as the ban stalls, a quieter regulatory success is delivering real reductions in what retailers pay to accept card payments. According to Willis, interchange fees — the charges that flow between the card-issuing bank and the merchant's bank — have been reduced by more than half due to Commerce Commission intervention.
That reduction should mean retailers are not having to pass on as high surcharges as they have in the past, Willis said.
Labour's deputy leader Carmel Sepuloni said the policy had been mismanaged and that Labour had proposed an alternative approach that would have placed the cost burden on credit companies and banks rather than small businesses. That suggestion did not gain traction.
What this means for consumers
The practical outcome for consumers is that while the headline ban on surcharges remains in legislative limbo, the underlying cost of running card payments has fallen meaningfully for retailers. Whether that flows through as lower prices, smaller surcharges, or simply absorbed into retailer margins varies business to business.
The original proposal was estimated to save New Zealanders $65 million annually. The Commerce Commission's fee reduction represents a separate and parallel saving that is already working its way through the system — even if it lacks the visibility of a formal ban.
For now, the most reasonable assumption is that card fees are on a gradually declining trajectory, even if the path there is messier than originally intended.
This article is for general information only and is not personalised financial advice. Seek advice from a licensed financial adviser (registered on the FSPR) for guidance specific to your situation.