The Commerce Commission says businesses in New Zealand will save an estimated $105 million each year by a reduction in fees to accept Mastercard and Visa payments – savings expected to be sustained and flow through to Kiwis over time.

With the introduction of interchange fee regulation in November last year, Commission Chair, John Small says payment providers have lowered the fees they charge for the vast majority of businesses in New Zealand for accepting Mastercard and Visa payments. 

Dr Small says “this is an important step for our work under new regulations helping to lower fees businesses face to accept contactless and credit payments.

“Our data to date shows that businesses will save an estimated $105 million each year – more than 40% above the $74 million predicted in May 2022.

“These should be ongoing savings in what businesses – including retailers like restaurants, your local hairdresser, dairy and café, who make up most businesses in the country – are charged by their payment provider, and we will be watching for what we expect to see in these businesses sharing this benefit with their consumers.”

Dr Small says payment providers need to do more to make information on their fees clear and transparent so businesses across New Zealand can make informed and confident decisions about what provider and plan is right for them. 

The Commission’s report is available here.

Background

Interchange fees are a significant component of the fees businesses pay to accept payments on the Mastercard and Visa networks. These fees are paid between payment service providers (usually banks) and are a cost that is passed to businesses as part of their merchant service fee for accepting credit cards and online or contactless debit cards that use these networks.

The initial pricing standard for the Mastercard and Visa credit and debit networks came into force on 13 November 2022. The initial pricing standard limits the interchange fee for certain credit and debit transactions.

Businesses may choose to recover the costs of accepting contactless and credit card payments through surcharges, but should ensure that any surcharges are no more than the cost to the business for accepting that payment type. Further information on our surcharging work is available here.