Retail NZ says the Government’s proposed ban on merchant surcharges will increase costs for consumers and disproportionately harm small businesses.
It has called on the Government to pause the proposed ban under the planned Retail Payment System (Ban on Surcharges) Amendment Bill, which was announced in July and passed its first reading last month.
Retail NZ said the Government should allow allow greater time for consultation on the Bill’s changes.
Chief executive Carolyn Young said the Bill was poorly targeted, rushed and risks significant unintended consequences.
Annually, Kiwis paid an estimated $150 million in surcharges, including $45-$65 million in excessive surcharges.
At the time of the announcement, Commerce and Consumer Affairs Minister Scott Simpson said “shoppers will no longer be penalised” for shopping with their preferred method, and would better know how much they would pay for their purchases.
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However, Young said the Bill “misses the mark”.
“It targets retailers — who are simply passing on the costs imposed on them — rather than addressing the root cause: the payment scheme providers.”
Young added it would “inevitably” cause prices to rise in-store.
“This will cost consumers and increase their concerns about the rising cost of living.”
Retail NZ represented nearly 70% of New Zealand’s domestic retail turnover and surveyed its members to understand their views of the proposed ban.
It showed 26% of retailers supported the ban, and 65% opposed it. Retail NZ said 44% of respondents currently applied a surcharge, up from 26.5% in 2024.
Seventy percent supported the current system, where customers could choose a payment method which to avoid a surcharge, and businesses could choose to apply a surcharge.
If the ban was to be implemented, 45% of respondents said they would increase prices across the board and 28% would consider stopping certain payment methods which could incur higher fees.
Retail NZ called on the Government to pause the Bill for “thorough consultation”, and support the Commerce Commission’s planned 2026 review and consultation of surcharging.
It also asked the Government to include online transactions in any further surcharge regulation, encourage investment in technology which enabled accurate, fair surcharging, and focus on transparency and consumer education, rather than blanket bans.
“Retailers are not profiteering. Surcharges are a transparent way to recover the high costs of accepting certain payment methods. If this Bill passes, those costs won’t disappear — they’ll just be hidden in higher prices for everyone.”
When the first reading passed, Simpson said businesses would already be saving money through a reduction in banking fees.
“By the time the ban is in full swing, the savings from the Commerce Commission’s latest cut to banking fees will benefit businesses, with expected savings of up to $90 million a year. That’s on top of the earlier savings of $140m from caps set in 2022.
“The ban means Kiwi shoppers will no longer be confronted at payment terminals by a pesky sticker and surprise, sometimes excessive, costs.”
