Credit card savings positive, surcharge maybe not

Media release

Newmarket Business Association

Monday 5 October 2009

Credit card savings positive, but surcharge maybe perceived negatively

News out of the Commerce Commission that credit card interchange fees will be set by competition, potentially saving the New Zealand retail sector tens of millions of dollars is welcome news. However given the economic climate the suggestion of a surcharge on credit card transactions may be resisted by consumers, and retailers will need to tread carefully," says the head of Auckland's leading retail district, Cameron Brewer, chief executive of the Newmarket Business Association.

"Any competition that brings down credit card fees for retailers is good, particularly as their margins are so squeezed at the moment. However a two-tier payment system might be resented by consumers given just how prevalent credit card usage is. One price for credit cards and another price for cash may leave a bad taste in many people's mouths given we've become such a cashless society.

"Retailers will look at this very closely before implementing a pricing deferential. They'll know that there could be market resistance. I suspect retailers considering a two-tier payment system may be more likely to promote a cash discount than a credit card surcharge - that is focus on the positive not the negative," says Mr Brewer.

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