Retailers are calling for the government to pause the proposed card surcharge ban, arguing that it will hurt both consumers and businesses.
Retail NZ and the Auckland Chamber, alongside a broad coalition of 35 Chambers of Commerce, industry and business associations, have been urging the consideration of the proposed ban on surcharges on all in-person transactions via the Visa and Mastercard networks.
According to Retail NZ CEO Carolyn Young, the ability to apply surcharges is “a vital tool for cost recovery”, especially for small and medium-sized enterprises.
“Removing this flexibility will force businesses to absorb high credit card processing fees. This will ultimately lead to higher prices for all consumers while banks and credit card companies benefit through increased fee collection,” she said.
Young described the Retail Payment System Amendment Bill as poorly targeted, rushed and risks unintended consequences.
“It targets retailers – who are simply passing on the costs imposed on them – rather than addressing the root cause: The payment scheme providers,” she said.
“This bill will entrench the dominance of the major credit card companies and make it harder for new payment technologies via FinTechs to gain traction. It’s a step backwards for competition and transparency,” she added.
Retail NZ cited its recent survey, which found only 26 per cent of retailers support the surcharge ban. About 70 per cent support the current system, which allows customers to choose a payment method to avoid a surcharge.
In a letter to Hon Scott Simpson, Minister of Commerce and Consumer Affairs, the signatories said that many businesses already choose not to surcharge, showing the market is functioning.
The letter also highlights that surcharges reflect the real cost of accepting high-fee credit cards, not a profit-making tool, and that a ban would unfairly shift costs onto all consumers, including those using low-cost payment methods like eftpos.
Instead of a ban, the business groups are calling for greater transparency so consumers understand the cost of their payment choices, investment in technology that enables accurate surcharging by payment type, and support for innovation in low-cost payment infrastructure.
