Commerce and Consumer Affairs Minister Scott Simpson announced the change on Monday afternoon, declaring: “That pesky note or sticker on the payment machine will become a thing of the past.”
“Shoppers will no longer be penalised for their choice of payment method, whether that’s tapping, swiping or using their phone’s digital wallet.”
Legislation is expected to be introduced to Parliament by the end of the year, with the ban to kick into effect no later than May 2026.
The proposed law would cover most in-store payments made using Visa and Mastercard debit and credit cards, as well as EFTPOS, but not online purchases or other international card schemes.
The move follows growing public frustration at the cost and transparency of such surcharges. Retailers are increasingly using them to recover merchant service fees charged by banks and payment providers, but the fees are often added without clear explanation.
The Commerce Commission estimates New Zealanders are paying up to $150 million in surcharges each year – including $45 to $65 million in what it considers excessive charges.
In March, Consumer NZ called for an outright ban, citing hundreds of complaints about fees being too high, confusing or oblique. Both Mastercard and Visa have also supported proposals for a ban.
Retail NZ has previously argued businesses did not like charging extra but should have the right to recover payment costs. It called for more clarity from banks about the fees charged for different services.
The ban builds on the Commerce Commission’s recent decision to reduce the interchange fees imposed on businesses for accepting Visa and Mastercard payments. Interchange fees make up approximately 60% of merchant service fees.
“A ban on surcharges means no more surprises for people who currently feel like they’re being charged to use their own hard-earned money,” Simpson said.
“It means they can make a purchase knowing exactly what they’ll pay, and how they’ll pay it.”
The changes would bring New Zealand into line with the United Kingdom and the European Union, where such surcharges are already prohibited.
Australia still allows surcharges but requires them to reflect the actual cost to retailers. The Reserve Bank of Australia has also recently proposed an outright ban on surcharges for EFTPOS and debit and credit card payments.
