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Consultation on retail payments begins

Hon Paul Goldsmith
Minister of Commerce and Consumer Affairs

19 October 2016

    Media Statement

Consultation on retail payments begins

Commerce and Consumer Affairs Minister Paul Goldsmith has today released an issues paper on retail payment systems for public consultation.

“Concerns have been expressed around the cost of credit card payment fees in New Zealand, particularly in comparison to Australia, and in the context of a decline in the use of EFTPOS,” says Mr Goldsmith.

Retail payment systems are the platform through which transactions (including credit cards) between consumers and merchants are processed. Fees for use of these systems (including interchange fees) are charged to businesses by banks and often passed onto consumers either through an extra surcharge or as part of the cost of goods and services.

“The issues paper is designed to get a better understanding of how retail payments operate in New Zealand, with particular regard to innovation and efficiency. It will inform MBIE’s policy work around whether regulation is needed to ensure a fair distribution of costs between banks, businesses and consumers,” says Mr Goldsmith.

There is a variety of policy responses to retail payment fees internationally, ranging from caps on charges such as in Australia, to minimal regulation as seen in Canada.

“In most markets, we expect competition between providers to keep costs down. The issues paper raises the question of whether or not that is happening in practice. Meantime, the sector is experiencing rapid technological change and innovation. In that context, I remain cautious about regulation that could affect innovation.

“But the government is watching this area closely and is prepared to consider regulatory options if competition fails to moderate costs. As an initial step we will be seeking greater transparency around the fees paid by merchants,” says Mr Goldsmith.

The public consultation period will run until 13 December 2016. The issues paper can be found here:

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