The Bill to help lower the cost of the fees retailers get charged for offering contactless and debit payment options is another step closer to becoming law, Commerce and Consumer Affairs Minister Dr David Clark said today.
“COVID-19 has changed the way we spend our money, with online and contactless transactions rising. However, these payment methods have higher fees for merchants, putting added financial pressure on businesses,” David Clark said.
“Reducing merchant service fees is a manifesto commitment for this Government, and critical to the recovery of the economy. That’s why it’s fantastic to see the Retail Payment System Bill introduced today.
“It could result in savings of approximately $74 million each year for New Zealand merchants. Small retailers and those who rely on credit or online sales will really benefit,” David Clark said.
The Retail Payment System Bill will:
require reductions in interchange fees as soon as possible
enable direct intervention by the Commerce Commission to regulate different participants in the retail payment system
introduce a disclosure and reporting requirement to enable the Commerce Commission to monitor the retail payment system.
“I recognise that merchant service fees need to reduce sooner, rather than later. That’s why we’re moving to limit the part of the merchant service fee we have the most concerns about before the new regulatory framework comes into effect in 2022.
“Credit and debit networks including Mastercard and Visa will have to adhere to these rules first.
“One of the main components of merchant service fees is the interchange fee which we will cap for credit card transactions at 0.8 per cent, in line with Australia.
“We’re also capping the interchange fees charged for online debit card transactions at 0.6 percent. Contactless debit card interchange fees will stay at their current levels of 0.2 per cent or less, and for swiped and inserted debit, it will stay at 0 per cent.
“I want to see retailers, in particular small retailers like dairies, benefit from lower fees as soon as possible,” David Clark said.
Following the first reading of the Bill, it will be referred to the Economic Development, Science and Innovation Committee for a period of four months, with a view to the regulations coming into effect next year.