Visa calls for ban on surcharges (2025)

Credit card company Visa is calling for a ban on the surcharge fee some merchants charge card-paying consumers at the point of sale.

The Commerce Commission was undertaking a review of card charges, and considering cutting the regulated interchange fee card companies can charge banks by as much as 75 percent, for example.

Card interchange fees were in turn passed on by banks to merchants at whatever rate the merchant can negotiate, meaning that some pay much more than others.

Visa country manager Anthony Watson said the focus should not be on its interchange fees, which were basically the same rate as those charged in the rest of the world.

He said interchange fees helped fund payment system innovations and should be treated by merchants as any other cost of doing business.

"What the commission is proposing is to reduce that fee down to a level that would compromise or risk where those investments can be made," Watson said.

"On certain types of credit transactions, 80 basis points is the interchange fee, and the proposed reduction brings that down to a very low level of 20 basis points which you can imagine on a $20 transaction is very low."

The commission was aware some merchants were price gouging consumers at the point of sale, and warned the practice was unacceptable, though difficult for consumers to detect.

"Different businesses pay different fees and the Visa and Mastercard fees are themselves quite complex and variable. Simplifying these fees is also part of our focus," commission chair John Small said earlier this year when the regulator invited submissions on the topic from the industry and other interested parties.

"We've been clear businesses should not be surcharging their customers more than the cost to them of accepting that payment."

New Zealand's EFTPOS code of practice meant that debit cards inserted or swiped at the point of sale did not attract a transaction fee, which was one of the reasons why some merchants applied surcharges for other types of card payments, such as credit cards, paywave and other contactless payment methods.

The commission estimated the average merchant card service fee for small businesses was about 1.2 percent to 1.5 percent, with some paying more than others.

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