Retailers Warn Up to 3% Price Hikes if New Zealand Bans Card Surcharges
New Zealand retailers warn that a proposed ban on credit-card surcharges, which currently average 1.5%–2.5% on Visa and Mastercard transactions, could force retailers to raise prices by up to 3% to cover processing costs. The Commerce Commission’s plan to cap or outlaw card fees may shift cost burdens onto consumers and reduce transaction volumes handled by Visa in the region.
1. Proposed Ban on Card Surcharges
The Commerce Commission is considering legislation to cap or outlaw surcharges on credit-card transactions, targeting fees that average between 1.5% and 2.5% for Visa and Mastercard. Regulators argue the move would improve fee transparency and reduce costs for consumers paying by card.
2. Retailer Response and Price Pass-Through
Retail groups have warned that without the ability to levy surcharges, retailers would face higher processing costs and could pass these costs to customers through price increases of up to 3%. Small and medium-sized businesses, in particular, say they lack the margin to absorb these expenses without impacting profitability.
3. Implications for Visa’s Business
A ban on surcharges could alter consumer payment behavior and reduce the volume of card transactions if merchants push customers toward cheaper methods like cash or debit. Visa may see a shift in transaction mix and local revenue, prompting it to engage with policymakers and merchants on alternative fee structures.