The New Zealand government has put forward a proposal to ban surcharges on most debit and credit card transactions in retail settings, with the aim of implementing this change by May 2026, reported Reuters.
The proposal follows a decision made by New Zealand’s Commerce Commission last year to reduce the fees that local businesses incur for processing Visa and Mastercard payments.
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This initiative is projected to save consumers around NZ$150m ($90.2m) each year.
Prime Minister Christopher Luxon was quoted by Reuters as saying: “We are scrapping surcharges at the till. New Zealanders are paying up to NZ$150m in surcharges every year. That’s money that could be saved or spent elsewhere.”
He further noted, “You no longer will be penalised for your choice of payment method, whether that’s tapping, swiping, or using your phone’s digital wallet.”
However, the ban will not apply to online transactions or payments made with foreign-issued cards, as well as prepaid, travel, and gift cards, the report added.
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By GlobalDataThe Commerce Commission estimates that consumers currently incur approximately NZ$150m in surcharges annually, which includes up to NZ$65m in excessive charges.
Commerce Minister Scott Simpson said: “Surcharges cover the fees businesses pay for accepting contactless payments and credit cards, but we know these are often excessive. In some cases, the retailer doesn’t even make it clear what the percentage is.”
The government plans to present the bill to prohibit most card surcharges by the end of this year.
Retailers in New Zealand typically charge around 0.7% for debit card transactions and up to 2% for credit card transactions, according to the Commerce Commission. In a similar context, Australia’s central bank has recently proposed the removal of surcharges on most debit and credit card payments, indicating that the existing system no longer effectively encourages consumers to make more efficient payment choices.
