Retail NZ has called on the Government to pause the proposed ban on surcharges until proper consultation has been taken.
Retail NZ has urged the Government to pause its proposed ban on merchant surcharges, warning that the move will increase costs for consumers and disproportionately harm small businesses.
Retail NZ Chief Executive Carolyn Young said the Retail Payment System (Ban on Merchant Surcharges) Amendment Bill is poorly targeted, rushed, and risks significant unintended consequences.
“This 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 said.
“If surcharges are prohibited, we will inevitably see prices rise in-store. This will cost consumers and increase their concerns about the rising cost of living.”
Retail NZ represents nearly 70 percent of New Zealand’s domestic retail turnover and surveyed its members to understand their views of the proposed surcharge ban. The results show strong opposition to prohibiting surcharges:
- only 26 percent of retailers support the surcharge ban, with the majority (65 percent) opposed to it
- 70 percent support the current system where customers can choose a payment method that avoids a surcharge, and businesses can choose to apply a surcharge
- 44 percent of respondents currently apply a surcharge. This is up from the 26.5 percent a Retail NZ survey recorded in 2024, reflecting rising costs and tighter margins for retailers
- 45 percent of retailers say they will raise prices across the board if the ban is implemented, while 28 percent may stop accepting certain payment methods that incur higher fees.
“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,” Young said.
Retail NZ warned that the ban will have a regressive impact, forcing low-income consumers who use cash or EFTPOS to subsidise the rewards and convenience enjoyed by credit card users.
“This Bill will entrench the dominance of the major credit card companies, and make it harder for new payment technologies via FinTechs to gain traction. It’s a step backwards for competition and transparency,” Young said.
Retail NZ’s submission to the Ban on Merchant Surcharges Amendment Bill also highlights the uneven playing field created by exempting online retailers from the ban, disadvantaging bricks-and-mortar businesses.
Retail NZ has called on the Government to pause the Bill and allow for thorough consultation, support the Commerce Commission’s planned 2026 review and consultation of surcharging, include online transactions in any future surcharge regulation, encourage investment in technology that enables accurate and fair surcharging, and focus on transparency and consumer education rather than blanket bans.
“Retailers are already under immense pressure. This Bill will only make things harder. We urge the Government to take a more pragmatic, evidence-based approach.”
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