New Zealand’s Commerce Commission has proposed a draft decision aimed at reducing the fees that Kiwi businesses incur for accepting Visa and Mastercard payments.
In July, the Commission disclosed that consumers spend approximately $95 billion annually using Visa and Mastercard products, leading to around $1 billion in fees for New Zealand businesses offering these payment methods.
Commission chair John Small stated, “We’re proposing a reduction of around $260 million a year to the largest component of the fees charged to New Zealand businesses for receiving Visa and Mastercard payments. We’re also making it clear that payment providers and businesses should pass these savings on to consumers.”
When businesses accept card payments, they pay a ‘merchant service fee,’ which they often offset by raising retail prices. The Commission noted that some businesses might struggle to understand the fees they are charged or may aim to profit from these costs, resulting in surcharges that exceed the actual merchant service fees.
“We’ve emphasized that businesses should not surcharge their customers beyond the cost of accepting that payment,” Small remarked. “Excessive surcharging can be challenging to identify, as different businesses face variable fees, and the Visa and Mastercard fee structures are complex. Streamlining these fees is also a part of our initiative.”
Small indicated that the anticipated reduction in merchant surcharges would be between 0.7% and 1%, and the Commission is prepared to legislate if these price changes do not reach consumers effectively.