New rules are making card payments cheaper for businesses and customers. Discover what this means for your bottom line.
If your business regularly accepts Visa or Mastercard payments, there’s good news. The Commerce Commission has stepped in to reduce the cost of interchange fees—the hidden charges that come with every card transaction. This move could save New Zealand businesses around $90 million a year, and it’s especially helpful for small businesses that rely heavily on card payments.
What’s Changing?
According to the Commerce Commission, Kiwi businesses are currently paying around $1 billion a year in fees just to accept Visa and Mastercard payments. These costs often get passed on to customers through surcharges or higher prices.
To ease the burden, the Commission has:
- Reduced interchange fees for Visa and Mastercard transactions
- Announced a ban on surcharges for in-person card payments (including PayWave and EFTPOS), expected to take effect by May 2026
- This follows earlier fee caps introduced in 2022, which have already saved businesses an estimated $140 million annually.
What Are Interchange Fees?
Interchange fees are a small percentage of each card transaction, paid by your bank (the merchant’s bank) to the customer’s bank. These fees are set by card networks like Visa and Mastercard and help cover fraud protection and card services.
For businesses, these fees form a major part of your card processing costs—and until now, they’ve been hard to avoid.
Why It Matters
If you’re absorbing these fees, they eat into your margins. If you’re passing them on, they can frustrate customers and potentially impact sales. Either way, it’s not ideal.
The Commerce Commission’s decision aims to:
- Lower costs for businesses
- Make card payments more affordable for customers
- Create a fairer payments landscape for everyone
What Should You Do?
If your business processes a high volume of card payments, this change could mean real savings. It’s a good time to:
- Review your merchant service fees
- Check how your payment provider handles interchange fees
- Consider whether you’re still charging surcharges—and plan to phase them out
Want help reviewing your transaction costs or understanding how this affects your accounting setup in Xero?
Get in touch—we’re here to help.
About Pathfinder Solutions
Pathfinder Solutions advisory team members have either owned or managed businesses, or are investors themselves, so we know first-hand the challenges you face in your world.
Sure we’re Accountants, but the best solutions in business come from focusing on more than just the numbers. Our real-world business experience delivers just that.
