Govt Lauds Commerce Commission’s Move to Slash Card Fees by $260M Annually

“The Government is relentlessly focused on reducing the cost of living so Kiwis can keep more of their hard-earned income and enjoy a better quality of life,” Minister Bayly said.

The Government has welcomed the Commerce Commission’s draft decision to reduce card transaction fees, a move expected to save New Zealanders approximately $260 million each year. Commerce and Consumer Affairs Minister Andrew Bayly highlighted the initiative as a critical step in easing the cost of living and enhancing financial fairness for consumers.

“The Government is relentlessly focused on reducing the cost of living so Kiwis can keep more of their hard-earned income and enjoy a better quality of life,” Minister Bayly said.

High credit and debit card fees, such as surcharges or payWave charges, have long been a burden for consumers, with fees often unclear and adding up over time.

“No one likes being hit by unexpected surcharges at the checkout. It’s time we ensured these fees are reasonable, fair, and transparent,” Bayly emphasized.

Interchange Fee Reductions

The Commerce Commission’s draft proposal targets interchange fees – costs businesses pay to accept Visa and Mastercard transactions. The proposed changes would cut the average fee from 1.5% to around 0.7%.

“This is a significant win for Kiwis and retailers alike. By lowering these fees, the Commission is enabling cost savings that will ultimately be passed on to consumers, as required by the Retail Payment System Act,” Bayly explained.

The Act stipulates that businesses may only charge customers the actual cost of processing card payments. This ensures that any reductions in interchange fees directly benefit shoppers.

Broad Consumer and Business Benefits

The proposed changes are expected to save New Zealanders $260 million annually, benefiting both consumers and businesses.

“The Commission’s move will not only make everyday transactions more affordable for Kiwis but will also provide much-needed relief for small businesses struggling with rising costs,” Bayly noted.

Call for Further Action on Surcharge Fees

While applauding the draft decision, Minister Bayly urged the Commission to introduce caps on total surcharge fees to address another area of concern for consumers.

“I have expressed to the Commission the urgency of tackling surcharge fees comprehensively. I expect them to present a solution covering both interchange and surcharge fees by mid-2025 and to implement these reforms as soon as possible,” Bayly stated.

Implementation Timeline

The Commission’s draft decision marks the beginning of a process to finalise and implement the changes. Once in place, New Zealanders can look forward to lower and more consistent checkout fees, improving transparency and fairness in everyday transactions.

This initiative underscores the Government’s commitment to alleviating cost-of-living pressures and supporting fair financial practices for the benefit of all New Zealanders.

For more information on the Commission’s draft decision, visit Commerce Commission Website.