Retail NZ are pleased with the Government’s plans to regulate credit and contactless debit card fees.
Fees for contactless debit and credit card transactions in New Zealand have been much higher than in similar markets overseas such as Australia and the UK. Retail NZ’s chief executive Greg Harford says he continues to hear from retailers that fees are too high, and that they can act as a deterrent to the uptake of contactless payments.
“Merchant Service Fees are levied by a retailer’s bank whenever a customer uses a contactless debit card, or a credit card. A key component of merchant service fees are interchange rates, which the banks pay to each other. Fees for ecommerce transactions, often charged by a payments gateway, and Buy Now Pay Later services are even higher.”
In retail, merchant fees tend to be incorporated into the price of goods, whereas in the hospitality sector, surcharging is more prevalent. In both sectors however, customers are paying more for goods and services because of the fees.
Harford explains that there is a wide variation in the fees charged by banks across the retail sector and merchant fees can often be complex to understand.
“Retailers need to be closely reviewing what Merchant Service Fees they are being charged by their Banks, and the kinds of cards their customers are paying with, in order to make sure they are getting the best deal.”
Retail NZ has been campaigning for increased transparency and oversight of merchant service fees for some time. Harford says the Government initiative to regulate fees is a positive step towards supporting retail businesses and their customers.
“Retail NZ will be closely reviewing the consultation paper released by the Government and making a submission.”