New Zealand’s Commerce Commission Proposes Cutting Merchant Card Fees

New Zealand’s Commerce Commission has proposed reducing the fees the country’s businesses pay for accepting Mastercard and Visa payments.

The Commission issued its draft decision Wednesday (Dec. 18) and is seeking feedback on it from consumers and businesses by Feb. 18, 2025, it said in a Wednesday press release.

“This work is the next step to further reduce, and simplify, payment costs for New Zealand businesses, and to save merchants and consumers a considerable amount of money,” Commission Chair John Small said in the release.

Reached by PYMNTS, a Visa spokesperson said in an emailed statement that the company is reviewing the Commission’s announcement and will respond to it in due course.

“Visa is committed to working with the Commerce Commission and industry to ensure New Zealand’s payments ecosystem is resilient, future-ready, and benefits businesses and consumers,” the statement said.

Mastercard did not immediately reply to PYMNTS’ request for comment.

The Commission issued its draft decision after finding that New Zealand’s consumers spend about $95 billion each year using Mastercard and Visa products and that the country’s businesses pay about $1 billion in fees to provide those payment options, according to the release.

“We’re proposing a reduction of around $260 million a year to the largest component of the fees charged to New Zealand businesses to receive Visa and Mastercard payments,” Small said in the release. “We’re also setting the clear expectation that payment providers and businesses should pass these savings on to consumers.”

Businesses generally seek to recover the merchant service fees they pay by charging higher retail prices or surcharges, and they sometimes set those surcharges higher than the actual merchant service fees, according to the release.

The Commission has said that businesses should not surcharge their customers more than they paid to accept the customers’ payments, the release said.

The average merchant services fee for small businesses ranges from 1.2% to 1.5%, per the release.

“If our draft decision is implemented, we’d expect to see consumers benefit from lower surcharges of around 0.7% to 1.0%, or through the prices of goods and services that reflect the lower fees,” Small said in the release. “We’ll be doing more work next year to determine whether, and to what extent, regulation of surcharges is necessary.”

Fees for credit and debit card use have been challenged in other countries as well.

On Friday (Dec. 13), the U.K.’s Payment Systems Regulator (PSR) proposed a price cap on cross-border interchange fees and said it is seeking comment on the level at which the cap should be set.

In November, a U.S. Senate hearing focused on “credit card swipe fees” and heard from critics who said those fees burden consumers and businesses and from Visa and Mastercard executives who said their networks deliver value to those same consumers and businesses.