National has announced a reset to how funding from the International Visitor Levy (IVL) is distributed, including a new $50 million a year Tourism Priorities Fund to support tourism growth and resilience.

Under the policy, IVL revenue will be split three ways from 1 July 2027: the $50 million Tourism Priorities Fund, $100 million a year to the Department of Conservation, and the remainder paid directly to councils based on their share of international visitor guest nights. National estimates the council portion would total an estimated $385 million over the first four years, rising from $86 million in 2027/28 to $106 million in 2030/31 — without introducing a bed tax.

The government has pointed to the policy’s intent with the new rejigg of the IVL funding allocation to be to back conservation, support tourism growth, and strengthen regional economies. There is also a commitment to not increasing the IVL for at least three years.

Where hospitality fits in

We’re generally supportive of this direction. Funding through the IVL is important to our sector, and it matters that tourism funding conversations recognise hospitality as part of the visitor economy, not just an add-on to it.

That said, several details are yet to be confirmed. Chief among them is what the $50 million Tourism Priorities Fund would actually support — whether hospitality initiatives specifically would be eligible, or whether it’s directed elsewhere within the broader tourism sector. We’ll share more detail as it becomes available.

New Zealand’s hospitality industry has set out 13 further recommendations for Government and industry action following the 2026 Hospitality Summit. The recommendations outline a wide range of initiatives to strengthen the future of the sector.

The Summit, hosted by Minister of Tourism and Hospitality, Hon Louise Upston in conjunction with Hospitality New Zealand (Hospitality NZ) and the Restaurant Association of New Zealand (Restaurant Association), was held on 12 March 2026.

More than 70 industry stakeholders and government officials attended the Summit at Parliament, to discuss a range of issues that matter most to hospitality, including:

• Employment and immigration
• Alcohol policy
• The intersection between tourism and hospitality
• Data, licensing and regulatory compliance
• Skills and training.

The 2026 Summit built on the inaugural 2024 event, where 63 recommendations. Work remains underway across those existing prioritirs, with 21 either completed or nearing completion.

Hospitality NZ Chief Executive Kristy Phillips says the 2026 recommendations report provides a clear roadmap for where the hospitality and accommodation industry believes further progress can be made.

“The first Hospitality Summit showed what’s possible when our industry and Government work together, sharing perspectives and insights, and we’ve made strong progress on the recommendations that came out of that process.

“This second report builds on that work, outlining where we’ve taken steps forward while also identifying where longstanding issues remain, and where new challenges have emerged.”

An additional 13 recommendations are outlined in the 2026 Summit report, including placing greater weight on industry experience and career progression in employment-based immigration pathways, and reframing the object of the Sale and Supply of Alcohol Act.

Restaurant Association General Manager Nicola Waldren says the report reflects the priorities raised directly by hospitality businesses and industry representatives.

“These recommendations are practical and focused on creating the conditions hospitality businesses need to invest, grow and create rewarding careers.

“What matters now is continuing to turn that collaboration into changes that operators can see and feel in their day-to-day businesses.”

Hospitality NZ and the Restaurant Association are committed to working with government and other interested parties to put positive changes in motion, say Kristy Phillips and Nicola Waldren.

“The recommendations cover a broad range of issues, but they’re connected by a common objective: creating a stronger, more productive and sustainable hospitality sector.

“The recommendations reflect the perspective the hospitality industry brings to policy and regulation. We also recognise that some of these recommendations will take some time to progress, especially if legislative change is needed.”

“On both fronts, Hospitality NZ, the Restaurant Association and the broader hospitality sector have a long-term ambition for improving our industry.

“We’re committed to working proactively and productively with government ministers and officials, local councils and key stakeholders to progress these issues as raised.”

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More information:

• Find out more about the Hospitality Summit here.
• Read Minister Upston’s media release welcoming the Report: Industry roadmap to help hospitality succeed

The topics discussed at this year’s Hospitality Summit will be familiar to hospitality operators: finding and retaining skilled people, navigating licensing and compliance, building stronger training pathways and creating the conditions for hospitality businesses to grow.

Those discussions have now been brought together in the Serving Success: Hospitality Summit Report 2026, released by the Restaurant Association and Hospitality New Zealand.

The report adds 13 further recommendations arising from the 2026 Summit, while continuing the work that began following the first Summit in 2024. Of the original 63 recommendations, 21 have now been completed or are nearing completion.

Hospitality’s voice at Parliament

The 2026 Hospitality Summit was held at Parliament on 12 March and hosted by Minister for Tourism and Hospitality Hon Louise Upston, together with the Restaurant Association and Hospitality New Zealand.

It brought hospitality operators from around the country together with government representatives and officials. With the conversation grounded in the day-to-day realities of running a hospitality business, our industry had a direct opportunity to explain where current settings are creating unnecessary costs, delays or barriers to growth.

The conversations covered five areas:

• employment and immigration
• alcohol policy
• tourism and hospitality
• data, licensing and regulatory compliance
• skills and training.

What are the 13 new recommendations?

The 13 further recommendations reflect issues raised through industry feedback and during the Summit itself. We are calling for:

• giving greater recognition to practical hospitality experience and career progression within immigration pathways
• improving access to immigration advisers with specialist industry knowledge
• reframing the object of the Sale and Supply of Alcohol Act to recognise hospitality’s positive social role and contribution to harm minimisation
• setting stricter timeframes for regulatory agencies to lodge objections to alcohol licence applications
• developing an internationally facing culinary brand for New Zealand
• strengthening links between Tourism New Zealand and our food and beverage sector
• establishing a Government subvention fund to help attract business events
• better protecting established venues when residential development moves into nightlife precincts
• encouraging night-time economy strategies that recognise the value of hospitality
• ensuring businesses can recover genuine payment-processing costs
• better coordinating building consent and alcohol licensing processes
• funding for Year 11 hospitality courses
• developing modern formal training for specialist areas of our industry, including coffee.

Government announces Hospitality Action Plan

In welcoming the report, Minister Upston also announced that the Government is developing a Hospitality Action Plan to provide a more coordinated approach to hospitality priorities across Government.

This is an important next step. The issues affecting hospitality often sit across several different portfolios, government agencies and levels of government. The Action Plan is intended to bring together work already underway, consider relevant recommendations from the Summit Report alongside other Government work programmes, and provide greater visibility across the Government’s hospitality work.

The Minister has committed to continuing to work in partnership with our industry as the Action Plan is developed, with a focus on removing barriers to growth and supporting hospitality businesses and our teams. We welcome the commitment to this more coordinated approach.

Continuing the work already underway

The latest recommendations build on solid progress from the first Summit in 2024. This includes changes to Easter trading restrictions and Accredited Employer Work Visa settings, work on alcohol licensing reform, the development of hospitality data and wellbeing resources, and the arrival of the MICHELIN Guide in New Zealand.

There is still more to do across the original recommendations, particularly in areas such as skills and training. The latest recommendations give us a clear next set of priorities without losing sight of that existing work.

Importantly, the report reflects what our industry has said it needs. The recommendations have come directly from the experiences of hospitality businesses and the people working across our sector. They focus on practical changes that would reduce unnecessary barriers, support investment and growth, and help us build rewarding, sustainable careers in hospitality.

The Summit gives us an important opportunity to put those experiences directly in front of Government. Our focus now is on turning that engagement into changes that operators can see and feel in their day-to-day businesses.

Some recommendations will take longer than others, particularly where legislative change is required. We will continue working with Ministers, government officials, councils and others to progress them — and to keep our members informed about what is changing.

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More information:

• Find out more about the Hospitality Summit here.
• Read Minister Upston’s media release welcoming the Report: Industry roadmap to help hospitality succeed

Hospitality sales increased in the second quarter of 2026. However, the latest figures show that growth remained modest in most regions and uneven across the industry.

National hospitality sales reached $4.02 billion during the quarter, representing a 2.9 per cent increase on the same period in 2025. This was a significant slowdown from the 6.5 per cent year-on-year growth recorded in the first quarter. This reflects the changing economic conditions experienced by businesses as the year progressed.

Experiences varied considerably across businesses and regions. Quarter two was noted for rising fuel and food costs, continued pressure on household budgets and uncertainty caused by global events. This meant that, for many operators, conditions remained extremely challenging. Anecdotally, we heard that April and June were particularly tough.

Our café and restaurant sector continued to perform more strongly than the industry overall, recording $2.01 billion in sales and year-on-year growth of 6.4 per cent. However, this was also down from the 8.1 per cent growth recorded in the first quarter.

On the surface, any increase in sales is welcome. However, annual inflation rose to 4.1 per cent in the June quarter. And prices for restaurant meals and ready-to-eat food increased by 3.1 per cent over the year. Taken together with total hospitality sales growth of 2.9 per cent, the figures point to little, if any, underlying growth in the volume of trade across the industry.

We continue to hear from members that even where revenue has improved, higher turnover has not translated into better profitability. Costs are rising at least as quickly as sales, while customers remain careful about how often they dine out and how much they spend when they do.

Pressure on both sides of the counter

On top of the fuel price increases and higher household costs continuing to constrain customer spending, food costs remained a particular concern. Overall food prices were 2.5 per cent higher in June than a year earlier. Meat, poultry and fish prices up 6.2 per cent.

Members have told us that there is increasingly little room either to absorb further operational cost increases or pass them on through menu prices without affecting demand. After years of finding efficiencies and doing more with less, there are fewer meaningful savings left to make.

This was reflected in our June business survey. Forty-three per cent of member respondents reported lower revenue than in the same period last year. Around two-thirds said their business was less profitable. Food costs were the most commonly identified challenge, alongside lower customer demand and wage costs.

Very different results across sectors and regions

Performance varied considerably across the industry. Alongside the 6.4 per cent growth recorded by cafés and restaurants, clubs grew by 5.4 per cent. Growth in pubs, taverns and bars was 3.4 per cent. Takeaway food service sales declined by 1.0 per cent, while catering sales fell by 6.1 per cent.

Regional results were equally mixed. Manawatū-Whanganui recorded the strongest growth, with sales increasing by 15.6 per cent. This was followed by the West Coast at 15.4 per cent and Canterbury at 9.8 per cent.

In contrast, growth in Auckland slowed to just 0.8 per cent. Given that Auckland accounts for approximately 39 per cent of hospitality sales nationally, the near-stalling of sales in our largest market had a significant effect on the overall result.

The gap between the strongest and weakest-performing regions reinforces what members have been telling us: conditions remain inconsistent and difficult to predict.

Where to from here?

There are some early signs of cautious optimism. Fuel prices eased from their peaks towards the end of the quarter, while preliminary outlook for quarter three is improved. July sales showed a noticeable improvement, jumping 7.8 per cent over the previous year. We will need to see whether that momentum continues.

The key for our industry is greater stability. Operators need a period in which costs, customer demand and the wider economic environment become more predictable.

The second quarter was not the clear step forward many had hoped for at the beginning of the year. Growth continued, but it was modest, uneven and, in many cases, absorbed by rising costs. A genuine recovery will not be measured by marginally higher sales alone; it will begin when sales growth starts to outpace the rising cost of doing business.

Members can download the full Q2 2026 Hospitality Sales Snapshot for detailed national, sector and regional results here.

100 Years of Kiwi Music. You helped make happen.

To celebrate 100 years of APRA, our friends at OneMusic are inviting 10 customers and their guests to attend the 2026 APRA Silver Scroll Awards | Kaitito Kaiaka on 14 October.

This exclusive opportunity is open to new and existing OneMusic customers nationwide and offers the chance to experience Aotearoa’s most iconic night of music at Auckland’s Kiri Te Kanawa Theatre.

Applications close 31 August 2026.

Learn more and register today: onemusicnz.com/news/apra100

T& Cs apply: Open to new and existing OneMusic customers nationwide. Double pass valued at NZD $500. Not normally available to the public. Travel and accommodation not included. Successful applicants will be drawn and notified on 21 September 2026.

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More information

• OneMusic are a Key Partner of the Restaurant Association – find out more here.

Technology is changing quickly, and it can be difficult to know which tools are useful for your business. This hub brings together our practical articles, webinars and resources on AI and digital technology—helping hospitality businesses understand the opportunities, build capability and use new tools with confidence.

Whether you are just getting started or looking for ways to work more efficiently, improve the customer experience or strengthen your business, you’ll find guidance here to support your next steps.

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Articles & insights

Explore articles, practical tips and industry insights to help you understand AI, build your digital capability and make technology work more effectively in your hospitality business. Access more AI articles here.

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Training & Professional Development

Build your confidence using AI and digital tools through practical, on-demand learning. Explore our webinar recordings to understand the opportunities, learn how technology can support your day-to-day operations and start applying it in your hospitality business. Access more on demand training here.

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Building technology capability is not about adopting every new tool—it is about understanding where technology can make a meaningful difference. By continuing to learn, experiment and build confidence, hospitality businesses can use AI and digital tools to work more efficiently, support their teams and create better experiences for their customers.

The Restaurant Association’s 2026 Election Manifesto outlines the practical policy changes we believe will help hospitality businesses grow, invest and continue strengthening their contribution to Aotearoa’s economy.

Our priorities for the 2026 election

The decisions made by the next Government will have a direct impact on the cost of doing business, access to skilled people and the conditions hospitality businesses need.

The Restaurant Association’s Manifesto sets out the practical policy changes we will be advocating for on behalf of the industry throughout the election campaign and with the next Government.

Hospitality generates more than $16 billion in annual sales, supports over 146,000 jobs and includes more than 20,000 businesses across Aotearoa. We forecast that, with the right policy settings, the industry could grow to more than $21 billion in annual sales and support around 158,000 jobs by 2030.

However, reaching that potential will require policy settings that reflect the realities of running a hospitality business. Operators continue to face tight margins, rising compliance costs, workforce challenges and an increasingly complex regulatory environment.

Our manifesto identifies six priorities:

• a strong and consistent partnership between Government and the hospitality industry;
• education, training and immigration settings that support the workforce our industry needs;
• recognition of hospitality as a core part of Aotearoa’s visitor economy;
• simpler, more consistent and more effective hospitality regulation;
• better access to business capability, productivity and innovation support; and
• safer, more vibrant town centres and hospitality precincts.

Turning industry priorities into action

The manifesto builds on progress being made, including through the establishment of a dedicated Minister for Tourism and Hospitality, the 2024 and 2026 Hospitality Summits, the Tourism Policy Statement and the Government’s Hospitality Sector Review.

These developments have created a stronger foundation for industry and Government to work together. Our focus now is on turning that engagement into more practical changes for hospitality businesses.

Our recommendations reflect what members have told us, the priorities identified through our Hospitality Summits and the issues we see affecting businesses every day.

Hospitality has enormous potential to grow its contribution to New Zealand. Together, these recommendations provide a practical blueprint for creating the conditions that will allow hospitality businesses, workers and communities to thrive.

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The Restaurant Association’s 2026 Election Manifesto is available to download here.

Hospitality operators will have the opportunity to explore new products, hear from industry leaders and pick up practical ideas for their businesses at Bidfood’s Taste of Summer Auckland Industry Event on Tuesday 18 August.

The Auckland event is the flagship Bidfood food show, with other events running around the country in August and September. Find out when the events are happening here.

In Auckland, over 125 exhibitors will be at the Auckland Showgrounds, showcasing food, beverages, technology, equipment and other innovations shaping the sector.

For businesses continuing to manage cost pressures, changing customer expectations and an evolving market, the event is an opportunity to see what is emerging across the industry—and gather ideas that can be taken back into their own operations.

Practical ideas from the kitchen

A full programme of live chef demonstrations will run throughout the day, covering menu inspiration, cooking techniques, reducing waste and getting more value from ingredients.

Demonstrations include sous vide cooking as a way to save time while delivering consistent results, using baking mixes to reduce costs and create additional menu opportunities, and breaking down a whole chicken to maximise yield and minimise waste.

Chefs will also prepare a range of dishes, from potato gnocchi and Wagyu short rib through to Madurai lamb rack, baked salmon and black truffle-inspired dishes.

Conversations about the future of hospitality

Three seminar sessions will explore some of the wider issues and opportunities facing hospitality businesses:

• Women at the Head of the Table: A conversation with women helping to shape the future of hospitality.
• Future Proof: From economic pressures to customer expectations—what comes next?
• Award-Winning Innovation That Delivers Business Value: How sustainability can support innovation and provide a competitive advantage.

Restaurant Association General Manager Nicola Waldren will join Lee Brown from Hospitality Association, Rebecca Brook from Rise Growth Lab and Tim Read from Hospitality Association for the Future Proof discussion at 11.30am.

The session will look at the trading environment facing hospitality businesses, how customer behaviour and expectations are changing, and what operators should be thinking about as they plan for the future.

Attendees will also have the opportunity to explore new food and beverage products, hospitality technology and business innovation from exhibitors across the show.

Event details

Event: Taste of Summer – Bidfood Auckland Industry Event
Date: Tuesday 18 August 2026
Time: 9.00am–3.00pm
Venue: Auckland Showgrounds, Greenlane

The Government has announced that hospitality will become one of nine new industry-led subjects available to Year 12 and 13 students from 2029.

The new Hospitality Food and Beverage subject will combine culinary, operational and business knowledge, helping students understand the breadth of careers available across our industry—from food and beverage roles through to operations and business leadership. Tourism will also be introduced as a separate subject.

This is a positive step towards creating stronger links between schools and industry. We have long advocated for clearer hospitality pathways that give young people practical, relevant learning and help them see hospitality as a skilled and rewarding career.

The subjects will count towards students’ secondary school qualifications and have the same standing as traditional subjects. Their development will be led by the Industry Skills Board (ISB), working alongside education experts and industry and the Association is engaging with the ISB on next steps.

There is still important work ahead to shape the subject content and make sure schools can deliver it well. We will continue representing the industry through this process so that the new subject reflects the skills businesses need and gives students a strong foundation for further study, training or employment.

Read the Government’s announcement.

Everyone can use a little extra help when it comes to reaching their money goals. We’ve teamed up with Westpac’s Managing Your Money programme supporting Sorted’s Money Month which is a nationwide public awareness campaign around building your confidence on all things about money.

The Managing Your Money Team Joins us to offer their engaging, practical, and interactive financial wellbeing programme to help you feel more confident when it comes to making decisions about your money.

You are invited to join the Westpac Managing Your Money team and collaboration special topics for their upcoming August webinars with a mix of topics to support theme of Sorted Money Month which is about having an emergency fund.

AUGUST WEBINAR SERIES:

Session One: Understanding Debt

Wednesday, 5 August. 11am-12pm

Register here.   

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Session Two: Saving and Investing

Tuesday, 11 August. 11am-12pm

Register here. 

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Session Three: Preparing for the future (Kiwisaver)

Tuesday, 18 August. 11am-12pm

Register here.

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Session Four: Mortgage Free Sooner

Wednesday, 19 August. 11am-12pm

Register here.

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Session Five: Legal & Financial Guidance (Wills & EPOAs)

Tuesday, 25 August. 12pm-1.30pm

Register here.

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Session Six: Protection & Advocacy (Financial Harm)

Wednesday, 26 August. 12pm-1.30pm

Register here.

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Westpac are strategic partners of the Restaurant Association – find out more about how they are supporting hospitality businesses here.

Auckland Council is considering allowing its Food Safety Information Bylaw to expire, which could remove the requirement for Auckland food businesses to display their food-safety grade.

This would not remove the grading system or change operators’ underlying food-safety responsibilities.

Businesses would still need to comply with the Food Act 2014, operate under the appropriate food control plan, undergo verification and receive a food-safety grade. Auckland Council would continue to monitor compliance, take enforcement action where required and publish grades through its online register.

What could change is the legal requirement for businesses covered by the Auckland bylaw to display their grade at their premises and on the digital platforms they control. Displaying a grade would instead become voluntary.

The council’s Regulatory and Safety Committee has recommended allowing the bylaw to expire when its current term ends in April 2027. Auckland Council’s Governing Body will make the final decision later this year.

For hospitality operators, food safety remains fundamental. Customer trust is central to a successful business, and the proposed change would not alter the standards businesses are expected to meet.

Compulsory display is not currently applied consistently across New Zealand and the Association believes regulatory requirements should be clear, proportionate and nationally consistent. If mandatory display is considered necessary, there is a wider question about whether it should be addressed nationally rather than through a local rule applying only to some businesses.

For now, there is no change to operators’ obligations. The proposal is still being considered, and businesses covered by the current bylaw must continue displaying their grade as required.

Commerce Commission

By email: [email protected]

Tēnā koe,

The Restaurant Association of New Zealand (the Association) welcomes the opportunity to submit on the Commerce Commission’s draft decision to introduce interchange fee limits for Mastercard and Visa commercial credit cards.

Since 1972, the Restaurant Association has represented and supported hospitality businesses across Aotearoa. Our membership includes more than 2,300 restaurants, cafés, bars, caterers and takeaway businesses.

Our position

The Restaurant Association supports regulating and lowering commercial credit card interchange fees.

Card acceptance is effectively essential for hospitality businesses—more than 98% of respondents to our August 2024 retail-payments survey accepted Visa or Mastercard credit card payments, while 96% accepted contactless payments. Card acceptance comes at a significant cost to businesses, most of which in hospitality are small operators working on tight margins with limited bargaining power over payment costs.

As Commerce Commission research has highlighted, card use has accelerated dramatically since 2019. The Commission estimates that businesses pay approximately $1 billion per year overall to accept Visa and Mastercard payments and pay $170 million annually in merchant service fees for Mastercard and Visa commercial credit card payments, including approximately $125 million in interchange fees. The Commission’s estimate that the proposed caps would reduce merchant costs by around $40 million demonstrates the material benefit of intervention.

Hospitality businesses generally cannot control whether a customer uses a commercial card. While commercial cards represent a relatively small share of transactions, they attract disproportionately high fees.

Our position is that merchants should not bear disproportionate costs to fund cardholder benefits from which they receive little or no direct value.

The proposed cap settings

We support the introduction of caps on commercial credit card interchange fees and welcome the substantial reduction proposed.

Domestic caps

However, we are not convinced that the proposed domestic caps of 0.50% for in-person transactions and 0.90% for online transactions go far enough.

The proposed rates include a 0.20 percentage-point premium above the equivalent domestic personal credit card caps. The Commission attributes 0.10 percentage points to a combination of additional issuer costs and merchant benefits. However, the Commission’s detailed analysis describes the differences in fraud costs as minor and the effect of differences in administrative costs as small. It also finds that many merchant benefits are already reflected in the personal credit card settings, although it identifies avoiding the cost of establishing and operating trade accounts as an additional benefit associated with commercial cards.

The Commission also notes that commercial card issuers can increase cardholder fees more readily because commercial credit cards are exempt from the Credit Contracts and Consumer Finance Act. This gives issuers greater scope than personal credit card issuers to recover costs directly from cardholders rather than through merchant-funded interchange fees.

The remaining 0.10 percentage-point premium is intended to promote market stability and align the proposed rates with the Australian benchmark—not to recover an identified additional cost or merchant benefit. Larger average transaction values also generate more interchange revenue under a percentage-based fee without requiring a higher interchange rate.

We do not consider market-stability considerations sufficient reason for merchants to fund an additional premium. The Commission should align domestic commercial credit card caps with the equivalent personal credit card caps, or limit any premium to the amount clearly supported by evidence of additional issuer costs and merchant benefits.

Foreign-issued caps

The proposed foreign-issued caps of 0.70% for in-person transactions and 1.50% for online transactions also remain particularly high.

Hospitality businesses are disproportionately exposed to foreign-issued cards because they serve international visitors. We note that the Commission’s draft decision cites evidence from the Australian Restaurant & Café Association and the Australian Hotels Association that card acceptance costs are hardest for the hospitality sector to absorb or pass on, given its exposure to foreign-issued cards and customer sensitivity to surcharging. This applies equally, if not more so, in New Zealand, given our higher reliance on inbound tourism than Australia.

Although we recognise that foreign-issued and online transactions may involve additional costs and fraud risks, merchants should not be required to bear higher fees unless the difference is clearly supported by evidence.

We consider that the proposed foreign-issued caps remain too high and should be lowered unless the Commission can demonstrate why these higher rates are necessary and proportionate.

Limiting mechanism

We also support the safeguard that prevents existing interchange rates that are already below the proposed caps from being increased simply because a higher cap has been set. The new caps should reduce high fees, not provide a reason to raise lower ones. We note that the Commission is not currently proposing to extend this safeguard to foreign-issued commercial credit transactions. Given hospitality’s high exposure to foreign-issued cards, we ask the Commission to confirm whether preferential or negotiated foreign-issued rates exist that could similarly be repriced upward, and to extend the same protection to foreign-issued transactions if so.

Education, transparency and monitoring

Education and transparency will be critical to the success of the proposed limits. Interchange is only one component of the total merchant service fee. Member feedback indicates that these fees can be difficult to understand, particularly under interchange-plus pricing, while blended pricing may prevent merchants from seeing the individual fee components.

We recommend that the Commission:

• encourage payment providers to clearly explain to merchants how the new interchange caps affect their pricing and total merchant service fees. Despite two previous rounds of interchange fee regulation, member feedback indicates that many merchants remain unclear about how the changes appear in their statements, particularly where they are on blended pricing and the interchange component is not separately visible;

• publicly report on its planned monitoring of pass-through, changes in pricing structures, and shifts in transaction volumes towards higher-cost networks following implementation. We welcome the Commission’s stated intention to monitor these areas, and consider public reporting would give small merchants and merchants on blended pricing confidence that the intended savings are being realised in practice, and would support early action if other fee components rise to offset the benefit of the caps;

• finalise and implement the new limits without unnecessary delay; the proposed two-to-three-month implementation period appears reasonable, provided there is a clear effective date and practical information for businesses;

• monitor impacts on the availability and cost of commercial cards, particularly interest-free repayment periods that some small businesses use for short-term cash-flow management; and

• monitor any migration towards higher-cost or less-regulated payment products and consider further action if this undermines the intended merchant savings.

Members as commercial cardholders

Hospitality businesses also use commercial credit cards themselves. A small November 2025 snapshot poll of members found that, although interest-free repayment periods were valued by 56% of respondents, more than 62% rated the additional benefits offered by their card as low value.

Given the small sample size, these results should be treated as indicative only. However, they support the Commission’s view that current interchange costs may not be proportionate to the value of cardholder benefits. We nevertheless support monitoring of any effect on access to short-term working capital and the overall cost of commercial card products.

Surcharging and the recovery of payment costs

Interchange fees are only one component of the total merchant service fee and the saving received by an individual business will depend on its transaction mix and its agreement with its payment provider. Lower interchange limits should not be taken to mean that businesses no longer incur payment acceptance costs.

Businesses should retain the ability to recover the reasonable, provider-specific cost of accepting a payment method. Any consideration of applying surcharge restrictions should be separately consulted on and supported by evidence about merchants’ total costs. Businesses also need sufficient time and clear guidance to understand the effect of the new limits before conclusions are drawn about reasonable surcharge levels.

Conclusion

The Restaurant Association supports regulating and lowering commercial credit card interchange fees.

However, we consider that the proposed caps should be lowered unless the Commission can clearly demonstrate that the proposed rates are necessary and proportionate. Small hospitality businesses have limited bargaining power but face substantial payment acceptance costs. These businesses will also be disproportionately affected by international card use. Where cardholder benefits are not matched by equivalent value to the businesses funding them, it is reasonable to reduce those costs.

The success of the proposal should ultimately be measured by whether small businesses can clearly understand what they are paying, see a positive effect from the regulated interchange limits, and benefit from lower payment acceptance costs without the intended benefit being eroded elsewhere.

(09) 638 8403

[email protected]

Restaurant Association of New Zealand

45 Normanby Rd, Mt Eden

Auckland 1024