By Renju Jose
(Reuters) -The New Zealand government on Monday proposed to ban surcharges on most in-store payments made using debit and credit cards from May next year, a move it said could save roughly NZ$150 million ($90.2 million) for Kiwi consumers.
The plan follows the decision last year by New Zealand’s Commerce Commission to lower fees that local businesses pay to accept Visa and Mastercard payments.
“We are scrapping surcharges at the till. New Zealanders are paying up to NZ$150 million in surcharges every year. That’s money that could be saved or spent elsewhere,” Prime Minister Christopher Luxon told reporters.
“You no longer will be penalised for your choice of payment method, whether that’s tapping, swiping, or using your phone’s digital wallet.”
Visa and Mastercard both welcomed the decision.
Banning surcharges was “a welcome win for transparency and fairness at the checkout for consumers and reflects Visa’s long-held view on surcharging globally,” Anthony Watson, country manager for New Zealand and South Pacific, said
A spokesperson for Mastercard said the ban aligns New Zealand “with other leading economies at a time when payment acceptance costs have never been lower”.
The proposed ban will not include online payments or transactions made using foreign-issued cards, prepaid, travel and gift cards.
New Zealand’s Commerce Commission estimates consumers pay about NZ$150 million in surcharges annually, including up to NZ$65 million in excessive surcharges.
“Surcharges cover the fees businesses pay for accepting contactless payments and credit cards, but we know these are often excessive. In some cases, the retailer doesn’t even make it clear what the percentage is,” Commerce Minister Scott Simpson said in a statement.
The government plans to introduce the bill to ban most card surcharges by the end of this year.
Shops in New Zealand typically charge consumers around 0.7% for debit card payments and up to 2% for credit card payments, according to New Zealand’s Commerce Commission.
Australia’s central bank this month proposed to scrap surcharges on most debit and credit card payments for consumers, saying it no longer achieved the intended purpose of steering consumers to make more efficient payment choices.
($1 = 1.6633 New Zealand dollars)
(Reporting by Renju Jose in Sydney; Editing by Saad Sayeed)
