File image. Photo: 123RF
Some of the consumer transaction fees for using cards will be coming down on Sunday and it is expected to drive up the availability of contactless payments.
The recent introduced Retail Payment System legislation sets limits on card interchange fees between card companies, which were the largest component of merchant service card fees.
In addition, the Commerce Commission will have the power to monitor the retail payment system and directly intervene to regulate such things as merchant surcharges.
Julia Nichol of the card payment service company Worldline said the changes would leave the interchange fees on contact debit payments at zero cost, however contactless debit payments will be capped at 0.2 percent of a transaction value, or a 5-cent flat fee, down from more than 1 percent.
As well all credit card payments will be capped at 0.8 percent of transaction value, down from a high of 2 percent.
Online transactions using a debit card will be capped at 0.6 percent of the transaction value, as some were more than 2 percent.
Commercial credit cards are exempt from the regulation, with some attracting interchange fees as high as 2.25 percent.