The Commerce Commission has done the easy part. Its final decision caps the interchange fees banks charge each other on Visa and Mastercard commercial credit cards, taking effect on 22 April 2027. The hard part is making sure the saving lands in a merchant’s bank account, and from there at the till, rather than being absorbed somewhere along a payments chain most business owners cannot see into.
On current evidence, that is far from guaranteed.
Business cards were the most expensive cards in the wallet
New Zealand businesses pay about $170 million a year in merchant service fees to accept Mastercard and Visa commercial credit cards. Retail NZ points out that these cards account for just 8% of transaction value but 19% of interchange fees. That gap exists because the corporate card perks, loyalty points, expense tools and interest-free periods, are funded partly by the merchant on the other side of the terminal. Every customer pays for them through prices, whether they carry a platinum business card or not.
The new caps set domestic commercial credit cards at 0.70% in person and 1.10% online, with foreign-issued cards at 0.70% in person and 1.50% online. The Commission first floated the regime in June, with a projected saving of about $40 million a year that has carried through to the final decision.
That is a reasonable outcome on a genuine market distortion. Interchange is not a freely negotiated price between a merchant and its supplier. It is set by the card networks and baked into the system, which is about as close to a justified case for intervention as payments regulation gets.
Retailers wanted a sharper cut
Retail NZ chief executive Carolyn Young says retailers “will feel let down by this decision”, given commercial cards draw the highest fees of any card accepted in store. Retail NZ had pushed for the bottom of the range the Commission canvassed, and Young argues the extra 0.2 percentage points in the final in-person cap “makes a real difference to retailers who accept these cards in store”. For a hospitality business running on single-digit margins, she is right. A fifth of a percent on every high-value corporate transaction compounds quickly.
But the bigger risk is not where the cap was set. It is whether the cap matters at all once acquirers and merchants reprice around it.
The last cap cut fees and surcharges kept spreading
New Zealand has run this experiment before. After earlier caps on personal debit and credit cards, the Commission found in March 2026 that the average surcharge fell, but the number of businesses surcharging actually rose. Consumer NZ has since collected examples of a dairy charging 5% and a shuttle operator charging 6%, rates no interchange schedule can justify.
Consumer NZ’s Jessica Walker is blunt about the new decision: “We would like to see some of the savings passed on to consumers. But we can’t see that happening.”
The structural problem is simple. The Commission regulates the wholesale fee between banks. It does not set the merchant service fee your acquiring bank charges you, or the surcharge you charge your customers. Its own decision paper commits only to monitor merchant service fees and undertake targeted reviews to check savings flow through. Monitoring after the fact is not a pass-through requirement.
Mastercard’s Australia warning deserves a hearing
Mastercard, unsurprisingly, questioned whether price regulation was justified at all. Its self-interest is obvious, but one point in its submission should not be dismissed. Australia capped Visa and Mastercard interchange in 2003 and left three-party networks like American Express alone. Two decades later, the Reserve Bank of Australia itself describes Amex as the largest issuer of commercial cards, with those cards costing merchants more to accept on average.
Cap one set of rails and the cost can migrate to the uncapped ones. New Zealand regulators should be watching for that from day one, not discovering it in a 2030 review.
What business owners should do before April
Do not assume the saving arrives automatically. Most SMEs sit on bundled or blended merchant pricing they rarely revisit, which is exactly the opacity that lets margin quietly stick with the acquirer. Ask your bank or payments provider now how commercial card pricing will change on 22 April 2027, request an itemised breakdown of interchange versus acquirer margin, and benchmark it against competitors. If you surcharge, review whether your rate still reflects your actual cost once the cap bites.
The cap is sound policy on a real distortion. Whether it works will be decided not by the Commission’s press release but by what merchant statements show in the second half of 2027. If those numbers have not moved, the pressure for blunter tools, including the surcharge ban still hanging over this debate, will only grow.
Sources
- RNZ: Commerce Commission moves on more card fees (2026-10-22)
- Scoop: Some Disappointment At Commerce Commission Card Cap (2026-10-22)
- Commerce Commission: Commercial credit card interchange fee regulation for Mastercard and Visa networks, final decision and reasons paper (2026-10-22)
- BusinessDesk: Commerce Commission moves to cap Visa, Mastercard business card fees (2026-06-04)
- RNZ: Card fee regulations are here, so why are card surcharges more common than ever? (2026-10-07)
- Commerce Commission: Mastercard response to commercial credit card interchange fee regulation draft decision (2026-07-20)
Join the discussion
Add useful context, ask a good question, or challenge an idea — keep it specific and respectful.