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Businesses To Benefit From Reduction In Payment Fees As New Regulation Kicks In

With a reduction in fees businesses are charged to accept Mastercard and Visa payments, the Commerce Commission says there will be immediate relief for small to medium businesses – and the benefits are expected to flow through to consumers over time.

Commissioner, John Small, says businesses’ costs are reducing because new regulations lower a significant component of the costs that their payment providers face. This regulation comes into effect on November 13, with many payment providers (usually banks) already having taken measures to comply.

With a reduction in costs, payment providers will be able to lower their fees for the vast majority of businesses in New Zealand – and particularly small and medium-sized retailers who rely on card-based transactions.

“SMEs like restaurants, your hairdresser, bakeries, cafés and other retailers – who make up most businesses in the country – should see immediate and permanent relief in what they are charged by their payment provider.

“Off the back of this reduction in fees, we will be watching for what we expect to see in these businesses sharing this benefit with their consumers.”

Dr Small says where businesses surcharge consumers for paying with Mastercard or Visa cards, the surcharge should be no more than the cost the business is charged for accepting that payment. In turn consumers should start to see surcharges reduce.

He says businesses who do not understand how these changes impact them should get in touch with their payment provider.

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The Commission is currently producing guidance to assist payment providers comply with their obligation under the new regulations. The final guidance is expected to be issued before the end of the year.


The new regulation is part of the Retail Payment System Act 2022 (the Act), which also gives the Commerce Commission the powers to, amongst other things:

  • Monitor payment providers and the networks they operate in
  • Regulate certain networks of retail payments, for example, the Visa and Mastercard networks
  • Set requirements for businesses that limit surcharging to no more than the costs of accepting payments

The term ‘payment provider’ is used to describe suppliers of payment services to businesses so that they can accept payments from consumers in-person or online.

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