Update on proposed card payment surcharge ban. The Restaurant Association is continuing to work with a coalition of national industry groups over the Government’s proposed ban on retail payment surcharges. Developments across the Tasman have reinforced the need for a rethink.
What’s happening in Australia?
The Reserve Bank of Australia (RBA) has signalled it may back away from a full ban on payment surcharges, following strong backlash from small businesses, banks, and industry experts. The RBA is now considering a more nuanced approach, potentially allowing surcharging on higher-cost credit and corporate cards, and reassessing proposed cuts to interchange fees.
This shift has raised further concerns as New Zealand seems poised to rush ahead with legislation that even Australian regulators now recognise is too blunt and disruptive for small businesses.
The impact on hospitality businesses
As the RA has highlighted before, for hospitality operators across New Zealand the proposed surcharge ban represents another financial pressure at a challenging time. Payment processing costs are genuine business expenses. We do not agree that under the proposed ban, hospitality operators will be forced to absorb these costs rather than transparently passing them on to customers who choose higher-cost payment methods.
A coalition for practical alternatives
Since the Government’s announcement in July of their intention to introduce a ban on surcharges for card payments, the Restaurant Association has has been working with other business organisations, including the Auckland Business Chamber, Retail NZ, New Zealand Chambers of Commerce Network, Bed & Breakfast Association New Zealand, Booksellers Aotearoa New Zealand, Hospice New Zealand, Hospitality New Zealand, and Retail Meat New Zealand to advocate for a more balanced approach.
Australia’s shift should ring alarm bells in Wellington. The business organisation coalition continues to support a practical alternative: capping debit surcharges at 0.5% and credit surcharges at 1% on personal domestic cards in the Visa and Mastercard schemes. T
The Restaurant Association’s view
We understand and support making payments simpler and more affordable for consumers. However, card payment surcharges represent genuine costs that businesses must pay. Without the ability to recover these fees, businesses will need to absorb them, further impacting already tight margins.
The Restaurant Association believes any changes to payment surcharging should:
- Recognise the genuine costs small businesses face
- Avoid simply shifting costs onto small business owners
- Allow transparent pricing that gives customers choice
We’re urging the Government to:
- Pause the proposed blanket surcharge ban
- Consider the lessons from Australia’s experience
- Engage meaningfully with small businesses who will be most affected
- Explore the coalition’s proposed cap model as a fairer alternative
Next steps
The Restaurant Association will continue working with coalition partners as we talk to Government to ensure hospitality operators’ voices are heard in this process. We’ll continue to keep members updated.
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