Retailers, Auckland Chamber lead resistance against surcharge ban

Wednesday, 24 September 2025

A ban on payment surcharges would hasten the demise of Eftpos, forcing retailers to pay merchant fees to banks on a higher percentage of transactions, business groups are warning.

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Dozens of business associations including Retail NZ and most Chambers of Commerce have written to Commerce Minister Scott Simpson urging the Government not to ban payment surcharges in shops, venues and eateries.

The Government announced in July that it intended to stop businesses imposing payment surcharges on contactless payments made in person using as Paywave and most credit cards, by May at the latest.

Retail NZ chief executive Carolyn Young said the proposed ban had since been extended to include internationally-issued cards that attracted higher fees.

The ban would not affect online purchases, such as payment surcharges on the sale of airline tickets.

Simpson said when he announced the proposed ban that surcharges were a hassle and an unwelcome surprise for shoppers, and described up to $65 million of the $150m collected in surcharges each year as “excessive”.

But business groups have been fighting a rearguard action against a ban, arguing it would hide the cost of bank charges and result in people who used cheaper forms of payment, such as Eftpos, subsidising those who didn’t.

“While the intention behind this policy may be to protect New Zealand consumers, we believe it is a misguided intervention that risks harming both consumers and the businesses that serve them,” the open letter said.

Young — who co-signed the letter with Auckland Business Chamber boss Simon Bridges — said that if the ban proceeded, it would result in the wider use of Paywave and Mastercard and Visa cards.

That would accelerate the decline of Eftpos and add costs for businesses, she said.

“This decision has been made without thinking about the implications of the demise of Eftpos, which will increase fees overall for businesses.

Retail NZ chief executive Carolyn Young has accepted critics of the payment ban have little chance of changing the Government’s mind, but says it is still important to get their opposition across.

“People will no longer understand the impact the merchant service fee has on the price they pay at the till, because it will no longer be visible.”

Other signatories to the open letter include Hospitality NZ, the Restaurant Association, Booksellers NZ and more than 20 Chambers of Commerce.

The ban has yet to be considered by a select committee, but Young said she didn’t believe the signatories had much chance, realistically, of changing the Government’s mind.

“The minister seems pretty adamant on the direction that he's taking and the need for an accelerated implementation time.”

But Retail NZ’s job included making sure the minister was aware of what businesses were telling it, she said.

“It's a significant portion of New Zealand businesses that are standing up and saying: ‘We don't support the decision that you've made.’”

Retail NZ was against businesses over-charging for payment costs and supported capping surcharges and “making it really clear what could or couldn't be charged”, she emphasised.

At the same time as pursuing the surcharge ban, the Commerce Commission has been moving to limit the interchange fees that card issuers can charge businesses for the use of their payment products.

The competition watchdog has estimated those controls will save businesses $90m a year after they come into effect in December.

That would reduce some of the case for retail surcharges, but the signatories to the open letter said the interchange fees represented “only part of the total merchant service fee paid by businesses”.

“Addressing interchange fees alone will not resolve the broader cost challenges businesses face,” they said.