Retail NZ warns that the government’s proposed ban on merchant surcharges will raise costs for consumers and unfairly impact small businesses.
It has urged the Government to halt the proposed ban outlined in the planned Retail Payment System (Ban on Surcharges) Amendment Bill.
This bill passed its first reading last month.
For Retail NZ, the government should provide more time for consultation on the bill’s proposed changes.
Each year, Kiwis are estimated to pay $150 million in surcharges, with $45-$65 million of that amount considered excessive.
Commerce and Consumer Affairs Minister Scott Simpson said at the time of the announcement that “shoppers will no longer be penalised” for using their preferred payment method and will have clearer knowledge of the total cost of their purchases.
However, Retail NZ chief executive Carolyn Young said the bill “misses the mark.”
“It targets retailers—who are simply passing on the costs imposed on them—rather than addressing the root cause: the payment scheme providers.”
Young also warned that the bill would lead to higher in-store prices.
“This will cost consumers and increase their concerns about the rising cost of living.”
Retail NZ, representing nearly 70% of New Zealand’s domestic retail turnover, conducted a survey among its members to gauge their opinions on the proposed ban.
The survey revealed that 26% of retailers supported the ban, while 65% opposed it.
Retail NZ also reported that 44% of respondents currently impose a surcharge, up from 26.5% in 2024.
70% favoured the existing system, which allows customers to select payment methods to avoid surcharges while enabling businesses to decide whether to apply a surcharge.
If the ban were implemented, 45% of respondents indicated they would raise prices universally, and 28% would consider discontinuing certain payment methods that carry higher fees.
Retail NZ also urged the government to extend surcharge regulations to cover online transactions, promote investment in technology that allows precise and fair surcharging, and prioritise transparency and consumer education instead of broad bans.
“Retailers are not profiteering. Surcharges are a transparent way to recover the high costs of accepting certain payment methods. If this bill passes, those costs won’t disappear—they’ll just be hidden in higher prices for everyone.”
Upon passing the first reading, Simpson noted that businesses were already benefiting from savings due to reduced banking fees.
“By the time the ban is in full swing, the savings from the Commerce Commission’s latest cut to banking fees will benefit businesses, with expected savings of up to $90 million a year. That’s on top of the earlier savings of $140m from caps set in 2022.”
“The ban means Kiwi shoppers will no longer be confronted at payment terminals by a pesky sticker and surprise, sometimes excessive, costs.”