- Hon Cameron Brewer
In a move that will save retailers around $40 million a year, the Commerce Commission has released a draft decision recommending the reduction of the fees businesses must pay the likes of banks to accept company cards, says Commerce and Consumer Affairs Minister Cameron Brewer.
“When a retailer gets charged too much to accept a payment, that cost doesn’t just sit with them. It gets passed on to all of us as consumers through surcharges and higher prices at the counter,” Mr Brewer says.
“Last year the Government asked the Commission to focus on where the costs of payments lie for businesses.
“We knew that businesses were getting charged too much, and this decision confirms that.
The draft decision today from the Commerce Commission on company cards builds on the earlier work to twice reduce interchange fees for businesses for other card types.
“Thanks to the work done by the Commission, businesses will be expected to save up to $290 million a year,” Mr Brewer says.
“Reducing these costs benefits consumers, as it is expected businesses will pass these savings through.”
Businesses get charged fees for all non-EFTPOS card transactions, including on company card transactions.
“New Zealand businesses are paying around $125 million a year in interchange fees for company cards, despite these cards only making up a small share of transactions. That’s not fair, and local businesses shouldn’t be wearing the cost,” Mr Brewer says.
“These fees are close to double what they are in Australia. Capping them means fairer costs for the businesses we rely on, and less pressure pushing up the price you pay at the checkout.
“This decision reinforces that the fees retailers currently pay are well above what it actually costs to process payments.
“This is all part of the Governments plan to fix the basics, build the future and ensure Kiwis are getting a fair deal at the checkout.”
Notes for editor:
- The Commission is now consulting on the draft decision and expects to make a final decision later this year. More information is available on the Commission’s website: Interchange fee regulation | Commerce Commission
- The fees for card payments are complex, and include costs from banks, credit card companies, and terminal providers, among others. These fees are charged through merchants, who are the single point of contact that businesses deal with (often their bank).
- Company cards, referred to above, are also known as commercial credit cards, and the Commerce Commission refers to them as such.
