A proposed ban on credit card surcharges in New Zealand, set to take effect in May, appears to be on its last legs after a key political party withdrew its support.
New Zealand introduced legislation last year to ban in-store surcharges on both card and contactless payments. An industry group, Retail NZ, opposed the move, warning that businesses would likely have to raise prices elsewhere to recover payment costs.
Now, the ACT Party, which had been working with the government to refine the bill, says the proposed ban is effectively dead. The opposition Labour Party had never supported the measure. While the country’s Commerce and Consumer Affairs Minister maintains the bill is still under consideration, its political backing has largely collapsed.
“It was obviously appealing to take away a fee that a lot of customers hate, but if it only puts that fee on to the small business, it’s not actually a win,” ACT Party leader David Seymour told RNZ. “It’s just a shift, and often carried by people that can’t afford it at all.”
A Political Hot Potato
These extra fees have become common in the U.S., where only three states—Massachusetts, Maine, and Connecticut—explicitly ban credit card surcharging. But debate over the fees, like the charges themselves, is becoming more visible. Don Apgar, Director of Merchant Payments at Javelin Strategy & Research, describes the situation as a “political hot potato.”
“If you’re in favor of surcharging, then you get framed as anti-consumer because these large merchants already make millions,” Apgar said. “If you’re anti-surcharging, then you get framed as being against small business.”
Consumer Complaints Are Being Heard
Consumers are starting to take notice of the surcharges—and they’re not happy. The issue may be approaching a tipping point where public sentiment turns against such fees for good.
“People are starting to pay attention to their bills and speak out against paying an extra fee,” Apgar said. “You’ll see the tide go out at about the same speed as it came in, with merchants gradually opting not to add surcharges.”
“I took my truck in for service last week and the guy has a notice on his website that credit cards will be charged an additional 3% fee,” he said. “But when I paid, no fee was added. I asked the owner, and he said he stopped surcharging because customers were complaining and he hadn’t updated the website yet.”
