Speaking up for you


Merchant fees for credit and contactless debit cards are a big cost for business. Retail NZ has been campaigning for cheaper merchant fees for some time. We are pleased that the Government has responded to this by passing the Retail Payment System Act 2022, key parts of which come into force from Monday, 14 November 2022.

Under the Act, interchange payments are being capped. This should mean that the total merchant fees you pay to your bank come down – but there is some detail that you need to know.

Interchange payments are paid between a bank that processes a credit or debit card payment, and the bank that issues the customer’s card. Depending on the arrangements you have with your bank you will pay either a bundled rate for card transactions – or you pay an “interchange plus” rate, comprising an “acquiring fee” plus interchange.

It’s good to know that, if you are on the special Retail NZ deal with Westpac, you are on “interchange plus”.

For most transactions, the Government has put caps on interchange as follows:

  • 0.8 per cent for Visa and Mastercard credit cards, or the rate that was in force on 1 April 2021 (whichever is lower);
  • 0.2 per cent for contactless Visa and Mastercard debit cards, or the rate that was in force on 1 April 2021 (unless the fee charged is a flat rate, in which case a five cent cap applies);
  • 0.6 per cent for Visa and Mastercard debit cards used online or via any other payment method;
  • standard EFTPOS debit transactions, where the card is inserted and the customer accesses their debit account remain free, with an interchange rate of zero.

The caps do not apply to international cards, commercial cards or prepaid cards. Cards issued by networks other than Visa and Mastercard (e.g. American Express and UnionPay) are outside the scope of the regulation.

The connection charges that you pay to providers like Worldline (previously Paymark) are also outside the scope of this regulation and will not change.

The changes should mean that your overall merchant service fees come down, but the impacts will depend on whether you are on “interchange plus” arrangement, and the mix of cards used by your customers. If you don’t feel like your rate has come down, or you feel like you are paying too much, it’s a good idea to check in with Retail NZ or call your bank.

No. If you are on an “interchange plus” arrangement, the changes will flow through automatically from 14 November. If you are on a flat rate with your bank, your bank should have written to you to let you know what the changes mean (if not, we recommend you call your bank to check). If your bank is putting your charges up, please let us know here.

The changes come into effect on 13 November, so you should start to see changes from the time of your next merchant statement.

Customers love to pay contactlessly, and we recommend that you consider this. There is a cost, but it’s good to know that these might not be as large as you think. Even though there’s a fee for contactless debit, some credit card transactions are cheaper if you go contactless.

Some businesses do charge customers an extra fee if the transaction has a cost with it. However, customers don’t like surcharges, and it can leave a bad taste in their mouths. 

If you are going to apply a surcharge, then that surcharge needs to cover only the costs you are incurring. For example, you can’t charge a five per cent surcharge if your bank is charging only one per cent.

At this stage, the Government has chosen not to regulate Buy Now Pay Later services – so there are no changes to the rates for these services. Retail NZ will continue pushing for these services to be regulated.

Get in touch with us at [email protected].

Our New Zealand payments research shows that Kiwi merchants pay a lot more than merchants in Australia and the UK. Fees in New Zealand are static or increasing, while they are going down overseas. Check out our survey reports here:

  1. 2019 Payments Survey
  2. 2018 Payments Survey
  3. 2016 Payments Survey
  4. Download our policy paper Towards Fairer Payments Fees’ including the results of our 2015 Payments Survey.

For further information, please contact [email protected].

Our Supporters


Would you like one of our team to give you a call? Let us know and we will get back to you.