Commerce and Consumer Affairs Minister Scott Simpson announced the ban in July.
Photo: 123RF
Thirty-five chambers of commerce have banded together – alongside industry and business associations – to urge the government to drop the proposed ban on PayWave transaction surcharges.
In a open letter to Commerce and Consumer Affairs Minister Scott Simpson, the group said the plan was a “misguided intervention” that risked harming consumers and businesses alike.
Simpson announced the ban in July, declaring: “That pesky note or sticker on the payment machine will become a thing of the past..”
“Shoppers will no longer be penalised for their choice of payment method, whether that’s tapping, swiping or using their phone’s digital wallet,” Simpson said.
Legislation was expected in parliament by the end of the year, with the ban taking effect no later than May 2026.
Retail NZ chief executive Carolyn Young said bans in other parts of the world had encouraged greater use of the PayWave services, which had fees attached to them.
“Consumer habits will change and those that are using Eftpos will transition to contactless. A higher percentage of transactions for every business will go through with a fee attached to it, which ultimately is going to impact margins for businesses and increase prices for consumers.”
‘Full and proper’ consultation
Young said the government needed to hit ‘pause’ on the proposed ban, and conduct a full consultation to ensure consumers and businesses fully understood the impact of any changes put in place.
“A simple decision made at a quick moment is not necessarily going to get the outcomes you expect,” she said. “There’s no free lunch.
“It’s really important for a full consultation for select committee and for consideration to be given to what’s actually happening as a result of the ban.”
Ban will ‘camouflage’ transaction fees impact
Young said a blanket ban would spread the charges associated with specific cards and payment systems across all purchases, regardless of what payment method customers chose.
“There’s different charges across a wide range of cards,” she said. “An international card, a commercial card, Diners, Amex or Union Pay – they’ve got higher fees and a debit card has lower fees than a credit card.
“If a surcharge ban is put in place, it’s not visible to a consumer what fees are being paid by the retailer and what increased cost might they be occurring.
“If someone’s going to pay by cash or by Eftpos, they’re going to pay the same price as someone that’s paying by credit card, so it just continues to camouflage the outcomes for everyone.”
She said surcharges allowed consumers to make informed choices about whether they were happy to pay a charge for the convenience of using PayWave.
“If somebody doesn’t want to pay a surcharge, they can either use Eftpos or they can go to another business. The market decides how people will engage with you.
“It means that a fair reflection of cost allocation – which surcharging is – won’t be there.”
Banks will ‘ultimately benefit’
Young said the ban would force businesses to absorb increasing transaction costs “with no ability to negotiate”.
“The banks are the ones that are issuing the credit cards and the debit cards, and the credit card companies like Mastercard and Visa are the ones that are ultimately going to benefit, because they’ll have more transactions going through.
“Ultimately, we do want to ensure that transactions are safe and that technology continues to be enhanced, but at what price? We have to find a price that is effective for everyone and that nobody is profiteering.
“Can you find that balance somewhere? That’s going to be important.”
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