New rules for what shops can be charged for accepting credit card payments are in place but so far neither retailers nor consumers are convinced they are seeing the benefits.

The regulations cap interchange fees, paid by the retailer's bank to the customer's bank for credit card transactions.

The rules were expected to save hundreds of millions of dollars a year, and it was hoped it would lead to retailers reducing or removing the surcharges they charge customers, too.

Regulations for domestic cards were introduced at the end of last year and rules for foreign cards arrived in May.

 

The Commerce Commission said it monitored surcharges using voluntary data that did not include the whole market. In March, it said, the average surcharge decreased but the number of businesses surcharging increased.

It said the overall cost to accept payments was increasing for shops because more payments were being made by Visa and Mastercard.

The share of fee-free eftpos payments was declining.

Jessica Walker, at Consumer, said she was concerned that businesses were not passing on any interchange fee-per-transaction reductions they were getting, because Consumer was still getting regular complaints about excessive surcharges.

"In the last few months, we've heard about a shuttle company charging a 6% surcharge, a dairy charging 5%, another shuttle company charging 3.94% and a law firm charging 3%. We continue to support a surcharge ban."

Retail NZ chief executive Carolyn Young said it was hard for retailers to get a clear view of what they were paying in interchange fees because statements from the banks could be difficult to read.

"The payment space is very complicated and most retailers are not going to know the complete ins and outs of it.

"They're going to look and see 'how much have I paid in fees and how much did I pay last month or last year'. And the key is that if your fees are going up, it could be that you've got a higher percentage of contactless payments going through your terminals."

She said in 2016, 44% of payments were on credit but now 72% were contactless.

"One of the tricky things with this surcharge space and the payment space is that it's not easy for any merchant to easily disseminate what's happening and to determine what their fees are for different transactions.

"We 100% support the Commerce Commission doing the work they were originally going to go and do, which was to do a full analysis of what the landscape looks like, what are the average fees that are being paid and what would be fair for a cap on a surcharge rate. And we can easily get behind that because the Commerce Commission are well skilled in doing that sort of work."

She said she hoped after the election the landscape would be more settled and that work could resume.

She said a surcharge could make a big difference to a business.

"Two percent can make a difference between you breaking even and making no profit or making a loss, even."

She said someone ended up paying the fee for the transaction, whether there was a ban or not.

"That's either going to get absorbed by the retailer or passed on. And if someone's already surcharging, you would imagine that they would then increase their prices because otherwise their margins of affordability [drop]. And it's in a landscape where we've got low consumer confidence, we've got low sales, we've got increased prices on electricity, insurance, rates, lease costs, wage costs, freight."

She said there had been discussion about a cap on surcharges of about 1% if fees fell to that level.

"If they can do the work and show that, then we can get behind and support that. Because that would be fair to consumers and to retailers. And so that would be the best thing.

"But the challenge at the moment is that it's such a complicated process. And some of the banks are better than others, but some of the statements are not easy to follow."

Commerce and Consumer Affairs Minister Cameron Brewer told RNZ National was still working towards a ban on credit card surcharges and there would be more to say in time.

A ban had been intended to take effect mid this year but did not progress.