The commission said it was concerning that many consumers may think they had no option but to pay the surcharge. Photo: 123RF
The Commerce Commission is taking action to address concerns about the level of surcharges applied to payments using cards.
The regulator said it had written to a number of large merchants raising concerns about the level of their surcharges, which did not apply when debit cards were inserted or swiped for payment.
"It's concerning that many consumers may think they have no option but to pay the surcharge at the end of their transaction," commission chair John Small said.
"In most cases of in-person card payments, you have the option of inserting or swiping your debit or eftpos card, rather than using the contactless function, and this should not incur a fee."
In any case, Small said, any surcharges needed to be in line with the costs of the transaction to the business.
"We want to be clear that we are not against surcharges that are in line with the costs of accepting the payment," he said.
"The ability to surcharge may make the difference between a retailer accepting a form of payment or not.
"Surcharges also mean that only those consumers using more expensive payment methods are impacted, as opposed to all consumers paying through higher retail prices."
Small said merchants also need to educate consumers about the payment options available.
"Not only do businesses need to remember that any surcharges added must be clearly disclosed and that any reasons for the surcharge are accurately described to avoid breaching the Fair Trading Act, but they should consider the levels of their surcharges as they may be in excess of their costs of accepting the payment," he said.
The commission has issued materials designed to help merchants educate consumers about their payment options, to support the crackdown.
"It is vital that businesses read the material we have issued and use them as a tool to understand how to suitably surcharge, even if they can only select a single surcharge due to terminal limitations or other factors."
Small said it businesses should contact their payment service provider if they were unclear about the costs of accepting various payments.
In addition to information for merchants, he said the commission had published an open letter to payment service providers to ensure they help merchants better understand card fees.
"This includes enabling merchants to have different surcharge rates where costs to merchants vary, for example, contactless debit compared with contactless credit.
"If payment service providers make these changes consumers should start to see surcharges for contactless and online debit Visa and Mastercard payments reduce.