Latest news with #JohnSmall
1News
18-07-2025
- Business
- 1News
Commerce Commission moves to lower debit and credit card surcharges
The Commerce Commission has moved to lower interchange fees paid by businesses to accept Visa and Mastercard payments. The regulator has issued a final decision, saying the cost was too high, and their decision would save businesses around $90 million a year. It said the average business would save around $500 each year in lower fees, but individual businesses could save more or less, depending on the mix of transactions they accept. The Commission put the overall cost of interchange fees at around $1 billion for businesses, which were often passed onto customers through surcharges and higher product costs. "This is an important step in our continued work to cut costs for businesses and consumers," Commerce Commission chair John Small said. "Our latest decision builds on the initial fee caps set in 2022, which led to $140 million in annual savings to New Zealand businesses." ADVERTISEMENT "This decision cuts the cost for businesses accepting payments made through credit cards and foreign-issued cards, which are often the most expensive for businesses to accept." The Commission said it would also explore what regulations may be needed to address excessive surcharging. The Commission expected payments providers to support businesses understand their costs to accept these payment types. It has also decided not to regulate fees for commercial credit card or prepaid debit card payments.
Otago Daily Times
17-07-2025
- Business
- Otago Daily Times
Commerce Commission moves to lower debit, credit card surcharges
The Commerce Commission has moved to lower interchange fees paid by businesses to accept Visa and Mastercard payments. The regulator has issued a final decision, saying the cost was too high, and their decision would save businesses around $90 million a year. It said the average business would save around $500 each year in lower fees, but individual businesses could save more or less, depending on the mix of transactions they accept. The commission put the overall cost of interchange fees at about $1 billion for businesses, which were often passed on to customers through surcharges and higher product costs. "This is an important step in our continued work to cut costs for businesses and consumers," Commerce Commission chair John Small said. "Our latest decision builds on the initial fee caps set in 2022, which led to $140 million in annual savings to New Zealand businesses." "This decision cuts the cost for businesses accepting payments made through credit cards and foreign-issued cards, which are often the most expensive for businesses to accept." The commission said it would also explore what regulations may be needed to address excessive surcharging. The commission expected payments providers to support businesses understand their costs to accept these payment types. It has also decided not to regulate fees for commercial credit card or prepaid debit card payments. Small told Nine To Noon the interchange fees were too high and they were bringing them down on a product by product basis to suit different types of payment, such as domestic or foreign cards, personal or corporate, in person or online. "That's going to result in merchants having $90 million a year more in their pockets in aggregate," Small said. Small said it had exempted commercial and pre-paid cards from the fee cap because it did not have enough information about them at this stage, but it did have concerns. He said it had not lowered the cap as much as indicated in a draft decision, which had suggested annual savings of $260m. "The reason that number has come down to $90 million is because we listened carefully to the feedback we received on that proposal and decided we needed to leave a bit more money in the system to incentivise new entry and dynamic competition we really want to see." However, the commission has not moved on surcharges on consumers for using paywave in shops. Small said it had wanted to first tackle the intercharge fees which set the cost base for the system, but consumer surcharges were on its agenda. "We still believe that some regulation is needed for surcharging, and that is the next step in this process ... so we're coming to that." He said the changes made would take a lot of the heat out of the issue because merchants would not be paying so much and so surcharges would be lower anyway. Restaurant body welcomes initiative The Restaurant Association said the Commerce Commission's decision to regulation interchange fees on credit cards offered much-needed cost relief for hospitality businesses. Association chief executive Marisa Bidois said the regulation would save industry members about $90m a year. "Hospitality businesses have long been burdened by some of the highest card payment fees in the OECD," Bidois said. "This decision puts money back into the hands of operators at a time when every dollar counts." Bidois said concerns about excessive surcharges at the point of payment was something that should be kept under review. "Our recommendation was to allow the new fee structure to bed in before taking further steps. We're pleased to see ComCom acknowledge this." The association was also urging payment providers to be transparent about their fees and not shift the cost burden elsewhere. "We'll be watching closely to ensure payment providers don't undermine this win for businesses by increasing fees in other areas," Bidois said.
NZ Herald
16-07-2025
- Business
- NZ Herald
Businesses to save $90 million a year as Commerce Commission tackles interchange fees
Commerce Commission Chair Dr John Small speaks with Ryan Bridge on Herald NOW about work looking into surcharges at the till and his controversial LinkedIn post about Uber Listening to articles is free for open-access content—explore other articles or learn more about text-to-speech. Access to Herald Premium articles require a Premium subscription. Subscribe now to listen. The Commerce Commission has issued its final decision today to reduce interchange fees paid by Kiwi businesses, saving them about $90 million a year in payment costs. It costs New Zealand businesses about $1 billion a year to accept Visa and Mastercard payments, which is often passed on to customers through surcharges and higher product costs. Today's decision builds on initial fee caps set in 2022, which led to $140m in annual savings for businesses. The commission hasn't ruled out further regulation to curb excessive surcharging. 'This is an important step in our continued work to cut costs for businesses and consumers,' Commerce Commission chairman Dr John Small said.
RNZ News
16-07-2025
- Business
- RNZ News
ComCom cuts transaction fees
money economy about 1 hour ago The Commerce Commission has confirmed it will reduce how much banks can charge to process credit card payments, which it says will save Kiwi businesses $90 million a year. The Interchange fee makes up about 60 per cent of the total fee a business has to pay to accept credit card and contactless payments. The Commission says those fees cost businesses around $1 billion a year, which is often passed onto their customers through surcharges and higher product costs. It has not made a decision yet on regulating those surcharges - with Commission chair John Small saying this will be the next step. An initial pricing cap on interchange fees for some domestic transactions on the Mastercard and Visa credit and debit networks came into force in November 2022, which is estimated to have saved businesses $160 million a year.
Scoop
16-07-2025
- Business
- Scoop
ComCom Saves Businesses $90 Million A Year In Payment Costs
The Commerce Commission has today issued its final decision to reduce interchange fees paid by Kiwi businesses to accept Visa and Mastercard payments. It costs New Zealand businesses around $1 billion a year to accept Visa and Mastercard payments, which is often passed onto their customers through surcharges and higher product costs. The Commission has determined this cost is too high and has acted to reduce this cost for businesses by around $90 million a year. 'This is an important step in our continued work to cut costs for businesses and consumers. Our latest decision builds on the initial fee caps set in 2022, which led to $140 million in annual savings to New Zealand businesses,' Commerce Commission Chair Dr John Small says. 'This decision cuts the cost for businesses accepting payments made through credit cards and foreign-issued cards, which are often the most expensive for businesses to accept. 'We expect our latest decision to see the average small business save around $500 each year in lower fees. Individual businesses could save more or less, depending on the mix of transactions they accept. 'In making this decision we were careful to balance lower costs for merchants today with keeping incentives for new fintechs to innovate and challenge the big established incumbents. That meant leaving enough money in the system to keep it competitive and safe from fraud and scams over the long term,' Dr Small says. Consumers can expect these cost savings to flow through to fewer and lower surcharges, but regulation may still be needed to curb excessive surcharging. 'We'll be exploring what regulation may be needed to address excessive surcharging, which we consider to be anything more than the cost businesses face to accept Visa and Mastercard payments,' Dr Small says. The Commission expects payments providers to support businesses to understand their costs to accept these payment types, so where businesses choose to surcharge it accurately reflects their cost. 'We have decided not to regulate the fees for commercial credit card or prepaid debit card payments at this time based on feedback we received during consultation. We're looking to understand more before deciding if these payment types should be regulated,' Dr Small says. Background The Commission prioritised addressing the costs businesses face to accept different payment types to ensure regulation of surcharging didn't have unintended consequences of moving costs for consumers from one area to another. Without action to lower the fees, limitations on surcharges could see businesses forced to absorb these fees and recoup the money elsewhere, like in higher product costs. Alternatively, it could lead to some businesses not offering certain payment methods, like contactless or credit, as they are too expensive. When someone uses a Mastercard or Visa credit card or makes a contactless payment, such as Paywave, the business receiving the payment is charged a 'merchant service fee'. It will most likely seek to recover this fee in the form of surcharges or higher product prices. This latest decision relates to interchange fees, which make up about 60% of merchant service fees. Mastercard and Visa card issuers (usually banks) receive an interchange fee every time a card holder uses their card at a business to make a payment. The remaining portion of the merchant service fees include fees that are paid to Mastercard and Visa, and to providers of payment services to businesses.
