Govt looks to regulate paywave fees for retailers

The government is moving ahead with its election promise to introduce regulation to bring down the fees banks charge retailers for paywave.

Commerce and Consumer Affairs Minister David Clark and the Minister for Small Business Stuart Nash announced the release of a discussion document at VicBooks in Wellington this afternoon.

Clark said it was not fair that New Zealand retailers paid nearly twice as much as their Australian counterparts.

"The high cost of these fees puts added financial pressure on businesses at a time when they are dealing with the economic impacts of Covid-19. In many cases, consumers are picking up the tab, as retailers pass on these costs through higher prices for goods and services.

"Interchange fees, which banks charge for credit and debit transactions, form a large share of merchant service fees. We are looking at ways of regulating these fees by introducing hard caps, targeted for different classes of retailers," he said.

Nash said that in a Covid-19 environment, offering contactless payment was more important than ever, and smaller businesses were predominantly bearing the brunt of these high fees.

"Because small businesses are so heavily reliant on credit and debit card transactions, they are at the mercy of the banks when it comes to receiving payments for goods and services.

"Reducing this business overhead would mean businesses can hold on to more of their own money and pass on savings to consumers. This in turn will aid the recovery from the pandemic by putting more money back in the economy," he said.

Nash said the banks showed "empathy and understanding" during lockdown when they temporarily waived these fees.

"There is nothing to stop banks starting to change their fee structure right now on card payments", he said.

Consultation on the discussion document closes on 19 February.

The minister will report back to Cabinet in April, before progressing with regulatory changes through Parliament.