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- The Commerce Commission plans to regulate fees for credit and contactless card payments.
- The clamp down could deliver $260 million a year in savings.
- The commission is warning businesses about setting surcharges higher than the fees they were paying.
The Commerce Commission wants to clamp down on card payment fees in a bid to deliver $260 million a year in savings.
The competition watchdog has issued its draft decision to reduce fees paid by businesses for accepting Mastercard and Visa payments - typically passed on to consumers through the cost of goods and services, and surcharges.
The commission has proposed to regulate fees for transactions using commercial and foreign-issued cards, and lower existing caps for other transactions.
Foreign-issued cards are currently unregulated in New Zealand.
"If our draft decision is implemented, we'd expect to see consumers benefit from lower surcharges of around 0.7 percent to 1.0 percent, or through prices of goods and services that reflect the lower fees," commission chair John Small said.
It would deliver about $260m a year to the biggest component of fees charged to businesses to receive Mastercard and Visa payments.
"We're also setting the clear expectation that payment providers and businesses should pass these savings on to customers," Small said.
The commission's research showed consumers spent about $95 billion a year using products from the two big card issuers, and New Zealand businesses incurred about $1b in fees to provide the payment options to customers.
The commission said some businesses set their surcharges higher than the actual fees they were paying.
"We've been clear businesses should not be surcharging their customers more than the cost to them of accepting that payment," Small said.
"Excessive surcharging is not easy to spot. Different businesses pay different fees and the Visa and Mastercard fees are themselves quite complex and variable. Simplifying these fees is also part of our focus," he said.
The commission said average merchant service fees for small businesses were around 1.2 to 1.5 percent and wanted any consumer surcharges to not exceed costs.
It also encouraged firms paying more than 1.5 percent to seek a better deal from their existing provider or find a new provider.
Feedback on its draft decision was due by 18 February 2025.