The New Zealand Chambers of Commerce (NZCCI) are warning that the Government’s proposed ban on retail payment surcharges, while well-intentioned, risks hitting small and medium-sized businesses with significant and unintended costs.
“We get what the Government’s trying to do here - no one wants to see consumers stung with unreasonable fees,” says Simon Bridges, CEO of the Auckland Business Chamber. “But banning surcharges across the board could end up doing real harm to small businesses, particularly in retail, hospitality, and tourism.”
In response to the Commerce and Consumer Affairs Minister's suggestion that the move will put money back in Kiwis' pockets, Bridges says the change risks doing the opposite for many small operators already under financial pressure.
“For SMEs, who make up 97% of New Zealand businesses, surcharges aren’t about profit – they’re simply a way to recover merchant fees from banks and payment providers,” says Leeann Watson, CEO of Business Canterbury. “If they lose that option, they either have to hike prices for everyone, or take the hit themselves. For some, especially those locked into recommended retail pricing, that’s just not possible.”
The NZCCI says the Government’s proposal risks shifting New Zealand from a user-pays system to an everyone-pays model.
“That’s not a silver bullet – it’s a blunt instrument. And it certainly doesn’t solve the real problem,” says Bridges. “The cost of accepting card and digital payments is still there - banning surcharges just hides it.”
Instead, NZCCI is urging the Government to tackle the issue at its source.
“If the Government wants to make a real difference for consumers and small business, it should focus on the merchant fees charged by banks and payment providers,” says Bridges. “That’s where the pressure should be applied.”
The NZCCI plans to make a formal submission on the Retail Payment System (Ban on Surcharges) Amendment Bill once it is introduced in Parliament later this year. Bridges says the Chambers will also continue engaging with members and Ministers in the lead-up.
“There’s still time to get this right – but we need policy that’s balanced and workable,” he says. “Let’s not solve one problem by creating a bigger one for the small businesses that keep our towns and cities running.”