The Government’s proposed ban on card surcharges appears to have stalled — and the Restaurant Association is welcoming the news.
The Association has been vocal in our opposition to the proposal. As the RA has highlighted before, for hospitality operators the proposed surcharge ban represents another financial pressure at a challenging time. Payment processing costs are genuine business expenses and we continue to call for a fair approach to managing payment costs for businesses.
Where things stand
The Retail Payment System (Ban on Merchant Surcharges) Amendment Bill, which was set to come into force no later than May 2026, appears to have lost momentum. Prime Minister Christopher Luxon recently confirmed the Government was taking “a breather” on the policy. In addition, coalition partners New Zealand First and ACT also signalled their reservations. Winston Peters said recently that it’s “going nowhere” and David Seymour has admitted that small businesses can’t afford it. The bill remains on the order paper but, for now, appears to be going nowhere fast.
We’ve been consistent in our opposition to this ban since it was first announced. We’re glad the Government is taking the time to consider the real-world implications for small businesses.
The proposal’s impact for hospitality
For many of our businesses absorbing merchant service fees simply isn’t commercially viable — particularly as contactless and credit card payments have become the dominant form of transaction across the sector.
A blanket ban on surcharges removes the ability of businesses to recover these fees transparently. If business owners are unable to apply a surcharge for this payment option, the inevitable result would need to be higher menu prices across the board — affecting every customer, regardless of how they choose to pay.
The Association’s position
We’re not opposed to reform. We welcome conversations about fairness and transparency in the payments system. But any meaningful reform must not simply shift the burden onto small businesses.
Australia recently stepped back from a similar policy after recognising the complications a blanket ban would create.
Next steps
The Retail Payment System (Ban on Merchant Surcharges) Amendment Bill is now languishing on the order paper, ready to be read a second time. In the meantime, we’ll keep advocating for policy settings that reflect the economic reality of running a hospitality business in New Zealand today.
We’ll continue to keep members updated as this situation develops.
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