- Government to introduce Retail Payment System (Ban on Surcharges) Amendment Bill by end of 2025
- Ban expected to be in place no later than May 2026
- Ban will apply to in-store payments made using domestic Mastercard, Visa debit, credit cards and EFTPOS
- Does not apply to does not apply to online payments, foreign-issued cards, prepaid gift or travel cards, or cards from networks like AMEX or UnionPay
What hospitality operators need to know
The Government has announced plans to ban card payment surcharges on in-store transactions, including Paywave and other contactless methods. The move, announced by Commerce and Consumer Affairs Minister Scott Simpson, is part of a wider effort to simplify costs for consumers and remove surprise charges at the checkout.
The proposed legislation is expected to be introduced before the end of 2025, with a ban coming into force no later than May 2026. It will apply to most domestic in-person card transactions, such as Visa, Mastercard, debit cards, and EFTPOS. Online payments, foreign-issued cards, and AMEX or UnionPay will not be affected.
What’s changing?
The change is part of a proposed Retail Payment System (Ban on Surcharges) Amendment Bill, which aims to make payment systems more transparent and affordable for consumers. The legislation is expected to be introduced to Parliament by the end of 2025, with a transition period to follow.
A survey in 2024 of Restaurant Association members found that 63% apply a surcharge on certain payments. These surcharges help recover merchant fees charged by banks and payment processors — which are often not insignificant. Under the new rules, these fees will no longer be able to be passed on to customers. Instead, businesses will need to absorb them into their overall pricing, which could lead to menu price adjustments or tighter margins.
The Restaurant Association’s View
The Association supports efforts to make payments clearer and more affordable for consumers but notes that the announcement has come as a surprise, with limited consultation. We understand and support making payments simpler and more affordable for consumers. However, these surcharges are genuine costs that businesses must pay to banks. Without surcharges, businesses will need to absorb these fees, further impacting already small margins.
These announced changes need to align with recent Commerce Commission announcements regarding the regulation of interchange fees in order to ease the burden on small businesses.
Additionally, the Association highlights the need for clear public education to help consumers understand how interchange and merchant service fees actually work. There’s concern that without this, operators may face further negative sentiment from customers unaware of the cost pressures behind the bill.
Timeline
- Legislation—the Retail Payment System (Ban on Surcharges) Amendment Bill—is expected to be introduced to Parliament by the end of 2025.
- The surcharge ban will be effective no later than May 2026.
What’s in scope?
- Included: Domestic Visa, Mastercard (debit and credit), and EFTPOS in-store payments.
- Excluded: Online purchases, foreign-issued cards, prepaid or travel cards, AMEX, UnionPay, and other international card networks
More information:
Government announcement on banning surcharges – Beehive.govt.nz
Restaurant Association press release response
Ban on credit card and contactless payment surcharges – Stuff
Government to ban card payment surcharges, businesses to pick up the tab – NZ Herald