The Commerce Commission is consulting on the potential to reduce hundreds of millions of dollars a year in costs to New Zealanders using the Mastercard and Visa payment networks – affecting nearly all consumers and businesses.
This is part of the Commission’s responsibility to promote competition and efficiency within the retail payment system.
Consumers spend approximately $95 billion using Mastercard and Visa each year in New Zealand which costs businesses – and ultimately consumers through higher retail prices and surcharges – around $1 billion annually. However, the Commerce Commission say that they think this cost is too high, especially when compared internationally, and see the potential to reduce these fees by more than $250 million per annum.They say there is an opportunity to reduce a significant component of the merchant service fee, which should in turn allow businesses to reduce retail prices as well as surcharges, for the benefit of their customers.
Reducing and simplifying these fees could reduce surcharges or even remove the need for surcharging altogether in some cases. This would also make it easier for consumers, the Commission and industry to identify where surcharges are excessive. Surcharges should only reflect the costs of accepting these card payments and we are exploring changes to fees which could see surcharges reduced to 0.7% or less.
This consultation also asks questions about other issues the Commission considers may require attention such as a lack of innovation and pace, which may be barriers to new and more secure payment options made possible through open banking.
The Commission is seeking views on the issues by 4pm on 20 August 2024.
The information paper can be found here.
Feedback can be provided via this form which is tailored to consumers and merchants. Alternatively responses can be submitted to retailpaymentsystem@comcom.govt.nz using the submission template found here.