New Law Extends Ban on Card Surcharges to Foreign and Commercial Cards by 2026

The Government has taken another major step toward eliminating hidden payment charges for consumers and easing compliance burdens for businesses. Commerce and Consumer Affairs Minister Scott Simpson announced that the Retail Payment System (Ban on Merchant Surcharges) Amendment Bill has passed its first reading in Parliament, expanding the current ban on surcharges to cover foreign-issued cards and commercial cards.

Making Payments Simpler and Fairer

At present, shoppers often encounter small but frustrating additional fees when paying with certain cards. The new amendment means that whether a customer uses EFTPOS, Visa, or Mastercard—domestic, international, or commercial—the transaction will be processed without a merchant-imposed surcharge.

Minister Simpson emphasized that the move creates a level playing field:

• For businesses, it removes the complexity of distinguishing between cards that allow surcharges and those that do not.

• For consumers, it ensures that the price they see is the price they pay, eliminating unexpected add-ons at the checkout counter.

The Minister highlighted that this measure particularly benefits international tourists. “Visitors from countries like the United Kingdom and across Europe, where surcharges have long been abolished, won’t feel as though they’ve stepped back in time or been unfairly treated when visiting New Zealand,” he said.

Implementation Timeline

The Government is pushing for a swift transition. Once the Bill receives final approval, a one-month implementation period will follow, with the ban fully in place by May 2026—or sooner if practical.

This accelerated timeline is designed to ensure consumers benefit without delay, while giving businesses adequate time to adjust their payment systems and pricing models.

Economic Impact and Savings

The surcharge ban builds on earlier reforms aimed at lowering the cost of payments for both businesses and consumers. The Commerce Commission’s latest decision to cut banking fees is expected to generate annual savings of up to $90 million for businesses. This follows on from the earlier $140 million in annual savings delivered by interchange fee caps introduced in 2022.

Taken together, these reforms represent a substantial reduction in the hidden costs of electronic transactions, allowing businesses to operate more competitively and ensuring consumers retain more money in their pockets.

Ending the “Sticker Shock” at Checkout

The Government’s broader retail payment reforms aim to modernize New Zealand’s financial infrastructure. Minister Simpson stressed that the new rules will put an end to the common sight of surcharge notices taped to payment terminals, which often created confusion and frustration for shoppers.

“The ban means Kiwi shoppers will no longer be confronted at payment terminals by a pesky sticker and surprise, sometimes excessive, costs,” Simpson stated.

Next Steps

The Bill will now proceed to the Finance and Expenditure Committee for further scrutiny and public consultation. Businesses, consumer groups, and other stakeholders will have the opportunity to provide feedback before the Bill’s second reading.

If passed into law, the measure will mark a decisive shift in New Zealand’s retail payment system, aligning the country with international best practices and signaling a stronger commitment to transparency and fairness in everyday transactions.