Accepting card payments is about to get cheaper and simpler for New Zealand businesses. The Commerce Commission has acted to reduce the costs of Visa and Mastercard transactions, while the Government is moving to ban in-store surcharges altogether.

The Cost of Card Payments

NZ businesses pay around $1 billion a year to accept Visa and Mastercard payments – costs that often flow through to customers as higher prices or surcharges.

A key driver of this cost is interchange fees – small percentages of each card transaction set by card schemes like Visa and Mastercard. These fees are paid from the merchant’s bank to the customer’s bank, covering services like fraud protection. For merchants, interchange fees make up a major part of card processing costs.

What’s Changing

  • Lower interchange fees: The Commerce Commission has reduced interchange fees, saving NZ businesses an estimated $90 million a year. The average small business could save about $500 annually – with larger savings depending on transaction volumes.

  • Ban on surcharges: The Government will ban surcharges on in-person payments (Visa, Mastercard, EFTPOS, and PayWave) by May 2026. This means businesses can no longer add an extra fee when customers tap or swipe in store.

Why It Matters

For years, businesses faced a lose-lose choice: absorb high card fees themselves or pass them on to customers. With reduced interchange fees and a ban on surcharges, both businesses and customers benefit:

  • Businesses save on processing costs, particularly those handling large volumes of card payments.

  • Customers avoid the sting of surcharges at the counter.

  • Fairer pricing becomes the norm, helping improve trust and transparency.

What You Should Do

  • Review your payment setup: Check your merchant service agreements and ensure you’re benefiting from the lower interchange rates.

  • Plan for pricing changes: If you’ve relied on surcharges, consider adjusting your base pricing before the 2026 ban.

  • Stay compliant: Update your checkout process, signage, and staff training to remove surcharges when the ban takes effect.

What This Means

This shift is good news for small businesses and their customers alike. Lower costs and no surprise fees mean a simpler, fairer payment experience. Now is the time to prepare your pricing and systems so you’re ready ahead of the May 2026 deadline.

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