New draft guidelines for interchange fee caps on the Mastercard and Visa networks has been released by the Commerce Commission.
The guidance has been created following engagement with participants across retail payment systems as new price limits on interchange fees come into effect in November.
Under the Retail Payment Act 2022, the Mastercard and Visa networks are now subject to price limits on interchange fees.
Interchange fees are charged by card issuers when consumers make payments to businesses using these networks — merchants also bear a fee.
“Any reduction in merchant fees will decrease the cost to businesses of accepting payments on these networks. As the cost of receiving payments comes down, we expect savings to be shared with consumers,” said commissioner Dr John Small.
He advised that any surcharging carried out by businesses should “reflect” the cost of providing a payment option and expects participants of these networks to become familiar with the new rules and guidance.
“We expect the November price limits on interchange fees will put downward pressure on the merchant fees paid by businesses.”
The commission says it welcomes submissions or comments on the guidance until October 6. The regulator currently aims to prioritise assessing and enforcing compliance with these limits to promote competition and efficiency in the retail payment system.
