Source: New Zealand Government
The Government is stamping out another payment pain point – extending its surcharge ban to foreign issued cards and commercial cards to make life easier for businesses and consumers, Commerce and Consumer Affairs Minister Scott Simpson announced today.
“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.
“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.
“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.
“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.
Note to editors
- Transactions through the Visa and Mastercard networks and by EFTPOS are the main method of card payment in New Zealand.
- The Commerce Commission estimates New Zealanders pay about $150 million in surcharges annually. An estimated $65 million of that is excessive
- According to the Commerce Commission, approximately 20% of New Zealand businesses surcharge. Most businesses choose to absorb payment costs as a usual cost of doing business.
- Businesses pay $1 billion in merchant service fees each year, mainly to banks, for accepting Visa and Mastercard debit and credit payments (including online transactions).
- Interchange fees make up approximately 60% of merchant service fees. The Commerce Commission has decided to cut these fees from 1 December 2025 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). The Commission estimates business savings of up to $90 million a year, on top of $140 million in annual savings from previous fee caps.
- Online transactions and payments through networks other than Visa, Mastercard and EFTPOS are excluded from the surcharging ban.
