Business groups unite in opposition to Government’s proposed surcharge ban

Wednesday, 24 September 2025

Lloyd Burr asks why Kiwis should pay a fee to use their own money (in one of the toughest explainer pieces he's done so far)

Thirty-seven business groups have signed an open letter in opposition to the Government’s proposed surcharges ban.

They said the move is “misguided” and risks harming both consumers and businesses.

Legislation to underpin the change would be introduced before the end of the year.

Over 30 business groups are uniting in opposition to the Government’s new surcharge ban, urging the minister to reconsider the proposal.

Thirty-seven Chambers of Commerce, industry and business associations have signed an open letter to the Minister of Commerce and Consumer Affairs Scott Simpson, saying the proposed ban is a “blunt instrument”.

In the letter, they said that the move is “misguided” and risks harming both consumers and the businesses that serve them.

They claim the ability to apply surcharges is a “vital tool” for cost recovery, especially for small and medium-sized enterprises already facing rising operational expenses.

The Government is getting ready to ban surcharges.

“Many New Zealand businesses do not apply surcharges, demonstrating that the market is functioning and that businesses are making informed decisions based on what works for them and their customers,” the letter said.

“A blanket ban will remove this flexibility, imposing a one-size-fits-all solution to a complex issue.”

The letter went on to say the proposal was “unfair”, risked accelerating the decline of Eftpos, while further increasing costs for businesses, and likely driving prices higher for consumers.

Auckland Business Chamber by CEO Simon Bridges.

“Eliminating surcharges does not eliminate these costs; it merely obscures them. Retailers will be forced to absorb these fees, likely resulting in higher prices for all consumers, regardless of their payment method,” the groups said.

Among the signees included Retail NZ, the Auckland Business Chamber, Hospitality NZ, and the Restaurant Association of NZ.

Commerce and Consumer Affairs Minister Scott Simpson says that in-store charges are like any other 'cost of doing business'. By mid-2026, the Government will ban most credit card and pay wave surcharges.

Writing in support of the letter, Retail NZ CEO Carolyn Young said banks and credit card companies will benefit at the expense of the consumer through increased fee collection, while Auckland Business Chamber CEO Simon Bridges said everyone from family-run businesses to larger operations will be affected.

The proposal was announced in July, with the Government planning to scrap in-store surcharges for Visa and Mastercard payments from mid-2026.

Surcharges cover the fees businesses pay for accepting contactless payments, including PayWave.

Legislation to underpin the change would be introduced before the end of the year, with Minister Simpson saying a ban would mean “no more surprises” for people who feel like they’re being charged to use their own money.

“It means they can make a purchase knowing exactly what they’ll pay, and how they’ll pay it,” he said.

Commerce and Consumer Affairs Minister Scott Simpson.

Some charges will continue, such as for American Express and foreign-issued cards, as they were based offshore and their fees were not already regulated.

Consumer NZ welcomed the ban, saying it would “put an end to excessive, hidden and unavoidable surcharges” that cost an estimated $65 million a year.

However, the proposal was criticised by the Labour Party, with spokesperson Arena Williams saying a ban would make the fee someone else’s problem.

Responding to the letter, Simpson told Stuff he disagreed with the claims made, specifically that over-surcharging is already prohibited. “Currently there is no law prohibiting excessive surcharging,” he said.

Simpson added that the trend internationally was to move towards banning surcharges.

“Similar bans are already in place in the United Kingdom and Europe, and the Reserve Bank of Australia has recently proposed banning surcharges on Visa and Mastercard debit and credit cards. Overseas precedent shows that a ban on payment surcharges works, and there is no reason for New Zealand to be an anomaly.”

Simpson said that by the time the surcharging ban is in place, businesses will be saving money from reduced banking fees, as announced by the Commerce Commission.

“This will save businesses up to $90 million every year, on top of the $140 million annual savings from 2022 fee caps.”

Simpson is encouraging businesses to pass savings on to their customers at the earliest possibility so they can enjoy a “surcharge-free summer”.