The Commerce Commission has released a draft decision aimed at reducing the fees businesses pay to accept Mastercard and Visa payments, which are often passed on to consumers through higher prices or surcharges.
The proposed regulations would cover fees for transactions using commercial and foreign-issued cards and lower the existing caps for other transactions.
Currently, foreign-issued cards are unregulated in New Zealand.
Commission chair John Small said the changes could lead to lower surcharges—around 0.7 to 1.0 percent—or lower prices on goods and services, delivering an estimated $260 million annually in savings to businesses and consumers.
The commission said that payment providers and businesses are “expected” to pass these savings on to customers.
Research by the commission revealed that New Zealanders spend about $95 billion annually using Mastercard and Visa, with businesses paying around $1 billion in associated fees.
While average merchant fees for small businesses range from 1.2 to 1.5 percent, some businesses set surcharges higher than the actual fees they incur. The commission encouraged those paying more than 1.5 percent to negotiate better terms with their providers. Simplifying complex and variable fee structures is also a key focus of the proposed regulations. Feedback on the draft decision is open until February 18, 2025.
