New Zealand Proposes Lower Fees For Mastercard And Visa Payments
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New Zealand’s Commerce Commission has announced a plan to reduce the fees businesses pay for accepting Mastercard and Visa payments. The Commission shared its draft decision on Wednesday, December 18, and is asking for feedback from both businesses and shoppers by February 18, next year.
The Commission said this effort is meant to lower and simplify payment costs for businesses in the country. It stated that the move could save a lot of money for both business owners and customers. John Small, the Chairman of the Commission, noted that the proposal is a huge step toward easing payment-related expenses.
New Zealand Businesses Pay $1 Billion For Card Payments
The Commission found that shoppers in New Zealand spend about $95 billion each year using Mastercard and Visa cards. Businesses end up paying around $1 billion in fees to allow these payments. The draft proposal suggests reducing the largest portion of these fees by $260 million each year.
The regulator said businesses should pass these savings on to shoppers. John explained that stores can cover fees by increasing costs or by adding extra charges. He said these charges must not be higher than the real card payment fees.
Currently, small businesses pay an average merchant service fee of 1.2% to 1.5% for card payments. The Commission’s proposal aims to bring these charges down to about 0.7% to 1.0%. If the plan is approved, shoppers could benefit from lower surcharges or lower prices for goods and services.
According to the update, New Zealand’s Commission plans to do more research next year to decide if regulating surcharges will be necessary. It wants to ensure that shoppers are not charged more than the fair cost of card payments.
The U.K.’s Payment Systems Regulator Suggests A Limit On Cross-Border Fees
Fees for using credit and debit cards have been a concern in other places as well. Recently, the U.K.’s Payment Systems Regulator proposed a cap on cross-border interchange fees. The U.K. regulator is now asking for feedback to decide how high the cap should be.
In the United States, lawmakers recently discussed “credit card swipe fees.” Critics argued that these fees are too expensive for both businesses and shoppers. Meanwhile, Visa and Mastercard executives defended the fees, saying their systems provide valuable services.
A Visa spokesperson shared that the company is reviewing New Zealand’s proposal and plans to respond soon. The company stated that it is committed to working with the Commerce Commission to improve the payment system in the country.
The spokesperson said Visa’s goal is to ensure that the payment system benefits businesses and shoppers while staying strong and ready for the future. If the proposal is approved, businesses in New Zealand could save millions of dollars on payment fees each year. These savings might lead to lower prices or smaller surcharges for shoppers.
