New Zealand consumers are set to benefit from lower checkout payment fees after the feedback period for the Commerce Commission’s draft decision to cut costs for businesses accepting Visa and Mastercard payments ended last week Tuesday, the 18th of March 2025.
The draft decision, announced back in December, 2024, is expected to save Kiwi businesses approximately $260 million annually. These savings are anticipated to be passed on to consumers, reducing the cost of everyday purchases.
Currently, New Zealand businesses pay around $1 billion annually in merchant fees, which are often passed on to consumers. The proposal aims to reduce these fees, bringing them down from an average of 1.2%-1.5% for small businesses to a range of 0.7%-1.0%. This reduction is expected to significantly impact small and medium-sized businesses, which often struggle with high operational costs, but it is also good news for consumers who often end up paying for these fees.
Commerce Commission Chair John Small emphasised, “We’re setting the clear expectation that payment providers and businesses should pass these savings on to customers.” The move is part of a broader effort to ensure fair pricing in New Zealand’s digital payment ecosystem.
The government supports the move, with Commerce and Consumer Affairs Minister Andrew Bayly noting, “Once implemented, Kiwis can expect to pay lower and more consistent fees at the checkout.” The regulation is expected to enhance transparency and competition among payment providers.
The consultation period for feedback on the draft decision closed last week on Tuesday, March 18, 2025. The Commerce Commission is now reviewing submissions, with final regulations expected in the coming months.
Industry experts have praised the initiative, highlighting that similar regulations in other countries have led to increased competition and lower costs for consumers. “New Zealand has been lagging behind in regulating merchant fees, so this is a welcome step forward,” said financial analyst Sarah Mitchell.
Meanwhile, some banks and payment providers have raised concerns about potential revenue losses. However, the Commerce Commission argues that the overall impact will be positive for the economy, as lower fees will encourage consumer spending.
The decision also aligns with international trends, as many governments worldwide are moving to regulate payment fees more strictly. Countries such as Australia and Canada have implemented similar policies, resulting in fairer practices and better outcomes for consumers.
Retailers, especially small business owners, are expected to benefit the most from the changes. Many have long complained about high transaction fees eating into their profits. Lower fees will allow them to invest in their businesses and offer more competitive prices.
With the final decision expected soon, consumers and businesses alike are looking forward to a more affordable and transparent payment system. The changes could pave the way for further reforms in New Zealand’s financial sector.
For more details, visit the Commerce Commission website.
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