The Commerce Commission has issued a draft decision which it said would help businesses reduce about $260 million worth of card fees each year.

According to the Commission, Kiwi consumers spend approximately $95 billion each year using Visa and Mastercard products, which results in $1 billion in ‘merchant service fees’ for businesses.

The average fee is about 1.2 to 1.5 per cent, which businesses would most likely seek to recover in the form of surcharges or higher retail prices.

In the draft decision, ComCom proposes a reduction of $260 million in merchant service fees a year, which would benefit retailers and, ultimately, consumers.

“If our draft decision is implemented, we’d expect to see consumers benefit from lower surcharges of around 0.7 to 1.0 per cent, or through prices of goods and services that reflect the lower fees,” said Commission chair John Small.

“We’ll be doing more work next year to determine whether, and to what extent, regulation of surcharges is necessary.”

The Commission is seeking feedback on this draft decision until February 18.