New Zealand’s government is set to introduce new rules to cut the fees banks charge businesses to swipe their credit cards. The government plans to finalise its policy by the middle of this year and the law is expected to come into force next year.
David Clark, New Zealand’s minister of Commerce and Consumer Affairs, said in a recent statement that The government will introduce the Retail Payments Systems Bill later this year. The Trade Commission will be given the power to review the merchant’s payment system.
Interchange fees are the fees a merchant must pay to the bank when a customer pays with a credit or debit card. Fees will fall to 0.8% for credit cards and 0.6% for online debit card transactions under the new rules. Fees for contactless debit cards (Paywave) will remain unchanged at their current level of 0.2 per cent or less, and fees for swiping and inserting debit cards will remain unchanged.
David Clark said, “These high costs put even greater financial pressure on businesses as they grapple with the economic impact of COVID-19. Reducing the merchant fees charged by New Zealand businesses is a priority for this government and is vital to our economic recovery.”
Mr Clark estimates that the reduced fees will save businesses NZ $74m a year. Smaller retailers and those that rely on credit or online sales will benefit.
Last year, both Visa and MasterCard agreed to lower fees for merchants. With the outbreak, banks also waived Paywave fees for merchants for a while, but they have since resumed.