The New Zealand government is moving to crack down on interchange fees with a proposed new regulatory regime to be overseen by the Commerce Commission.
A bill designed to reduce the currently-unregulated merchant service fees charged by banks in NZ will be introduced to parliament later this year.
New Zealand’s merchant service fees are set much higher than they are in Australia.
Under the proposed Retail Payments Systems Bill, the interchange fee for credit card transactions would be capped at 0.8 per cent, in line with Australia.
The interchange fees charged for online debit card transactions would be capped at 0.6 percent, while for contactless debit card interchange fees it would stay at the current level of 0.2 per cent or less, and for swiped and inserted debit, it would stay at 0 per cent.
Commerce and Consumer Affairs Minister David Clark said the caps would save New Zealand businesses approximately NZ$74 million each year.
“Pre COVID, Eftpos has been the main way Kiwis pay for goods and services, and this is fees-free for retailers. Increasingly, however, consumers are favouring contactless debit and credit cards,” Clark said.
“The high cost of these fees puts added financial pressure on businesses at a time when they are dealing with the economic impacts of COVID-19.
“Reducing the merchant service fees that New Zealand businesses are being charged is a priority for this Government, and critical to the recovery of the economy.”
The Bill will also enable direct intervention by the Commerce Commission using a broad suite of powers to regulate different participants in the retail payment system; and introduce a disclosure and reporting requirement to enable the Commerce Commission to monitor the retail payments system.
The Government expects the full regulatory regime to come into effect sometime next year.