Poll: Should Paywave costs should be passed on to customers?

Otago Daily Times

4 days ago

The Finance Minister says when a ban on contactless card payment surcharges comes into effect, businesses should pass on the cost to customers as they would any other business cost, if they can't absorb the bill.
The government plans to ban surcharges on contactless card payments no later than May 2026.
Commerce and Consumer Affairs Minister Scott Simpson announced the change on Monday afternoon, declaring: "That pesky note or sticker on the payment machine will become a thing of the past."
"Shoppers will no longer be penalised for their choice of payment method, whether that's tapping, swiping or using their phone's digital wallet."
The ban builds on the Commerce Commission's recent decision to reduce the interchange fees imposed on businesses for accepting Visa and Mastercard payments.
Finance Minister Nicola Willis told RNZ that change has led to an average reduction in costs for a typical retailer - a small business - of about $500 each week.
"So our concern has been, now that reduction has happened, how do we make sure that gets passed through to you, when you're at the shop. What's to stop the retailer just charging you the same fee even though their costs has dropped."
Banning the paywave fee was the simplest and most transparent thing to do, Willis said.
Businesses need to treat the interchange fee like any other cost in their business "and just include it in the price tag on the shelf", she said.
"It'll make it easier for people to compare what they're really having to pay. Just think about how many times you've been at the counter and then suddenly you learn that it's a 2.5 or a 3.5 percent surcharge and that gets added to the price of whatever it is you're buying. That's not very transparent."
The sector is warning prices may need to rise at restaurants and cafes due the ban.
Retail New Zealand chief executive Carolyn Young told RNZ retailers were not happy with the change and have told them they will increase prices as a result.
More people will use contactless payments as a result of the change, she said.
"It means that a retailer, a higher percentage of their transactions will incur a fee so any savings that they may have seen from the interchange fee, they'll be countered by the fact that a higher percentage of transactions will incur a fee anyway."
Young said retailers were already having a hard time trying to stay open.
Matthew Lane is the general manager of 54 Night 'n Day shops around the country and has never put a surcharge on payments.
"We fold it into the... overall cost of business, we never charged it... we like to keep things consistent to the customer," he told Nine to Noon.
While Lane welcomed the ban on paywave surcharges, he said it was the interchange fee which was a massive cost to business.
"For context, one of our stores paid over $80,000 to the merchant provider over the last year and that's just a massive cost to business for simply a set payment in store."
Paywave being used more as a result of a surcharge ban would further diminish savings, he said.
He questioned whether the reduction of the interchange fee went far enough and said it was likely some businesses would revert back to offering only Eftpos for transactions.
Asked if she thinks the ban will lead to inflationary prices, the minister said "I think that overall, people will charge the price that they think they can get away with".
The change doesn't include international credit card payments or online payments. Willis said these payments were usually much more expensive to process and people using these systems have to pay a bit more because they are protected from things like online scams and fraud.
Commerce and Consumer Affairs Minister Scott Simpson told RNZ the interchange fee was a cost of business.
"I think that the price you pay at the tills should be the same price that's on the shelf when you go to buy something."
The "vast majority" of businesses don't currently charge surcharges, he said. When questioned on that statement, the minister said this was something he knew from his personal experience when shopping and information from the Commerce Commission.
Consumer NZ chief executive Jon Duffy told RNZ with a reduction in the interchange fee, businesses would be making a profit off the surcharges if they remained in place.
"Retailers still pay a small amount ot offer those services, we think that once... the decrease comes into effect it will be less than 1 percent of the total cost of the transaction," Duffy said.
Many businesses would absorb this into the prices though there may be some who need to increase prices to cover the cost, he said.
"But it would be just the same as if their... power bill or their rent went up."
Consumer NZ was a bit disappointed online transactions were not included but it was understandable for now, he said.