Credit Card Surchage - Are you changing your method of payment?

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Forums › Finance and wealth management › Credit Card Surchage - Are you changing your method of payment?

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#3397918 29-Jul-2025 08:30

I support the end game here, but have mixed feeling about the way it is being implemented.

Why aren't they targeting the banks and credit card companies to lower fees for paywave also, to make it easier to retailers to absorb the fees?

Does anyone else see a massive risk here that retailers (dairy's for example) will just turn off the ability to pay via credit card and paywave?

I fear this will send us back even further.. 🤦‍♂️

wellygary

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#3397926 29-Jul-2025 08:52

jjnz1:

Does anyone else see a massive risk here that retailers (dairy's for example) will just turn off the ability to pay via credit card and paywave?

I fear this will send us back even further.. 🤦‍♂️

Its possible, but I suspect the shear weight of the contact payment industry, including the growth of A and Gpay will make it a very risky proposition for them ...

For retailers in a stretched economy, restricting the ways that customers can pay is probably the easiest way of sending them to your competitors...

I'm also expecting Visa/MCard to start more brand advertising to make them the preferred payment choice for customers,

Handsomedan

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#3397927 29-Jul-2025 08:59

mattwnz:

Is that information reported in the NZ media? There are plenty of compliants about electricity providers and fees. The government aren’t banning banks charging fees from what I have read.

And why would they?
Do you expect to do your job for free? Develop a massive piece of infrstructure for free? Pay staff, from no income? Cover fraud from empty pockets?

And the Commerce Commission just came out with legislation drastically reducing interchange and stating quite clearly that scheme fees and other mechanisms cannot be used to make up for this.
Go look at Page 7 of this publicly available document: https://comcom.govt.nz/__data/assets/pdf_file/0032/367457/Retail-Payment-System-Interchange-fee-regulation-for-Mastercard-and-Visa-networks-Final-Decision-and-Reasons-Paper-17-July-2025.pdf

And then read this (in particular, Section 10): https://comcom.govt.nz/__data/assets/pdf_file/0026/367460/Retail-Payment-System-Open-Letter-to-payment-service-providers-17-July-2025.pdf

Like I said...uninformed.

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#3397929 29-Jul-2025 09:01

jjnz1:

I support the end game here, but have mixed feeling about the way it is being implemented.

Why aren't they targeting the banks and credit card companies to lower fees for paywave also, to make it easier to retailers to absorb the fees?

Does anyone else see a massive risk here that retailers (dairy's for example) will just turn off the ability to pay via credit card and paywave?

I fear this will send us back even further.. 🤦‍♂️

You've clearly not read anything other than spin from the retailers assn and some vague headlines.
See my earlier post - regulation has been happening for a while and Paywave fees are very small.
Further regulation has just been put in place, so maybe have a read.

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mudguard

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#3397931 29-Jul-2025 09:04

If anything I think cash handling fees are more likely in the future. I don't know if I'm in the minority but I find cash quite annoying. I wouldn't miss it if it were gone.

On the other hand, dealing with partner's mother's estate a few years ago, we had to sort out of bit of stuff like grazing, stock feed etc and absolutely everything was cash. I would ask for an account number so I could transfer the money and pick up the next day. But no, everything was cash. Made me feel like a pleb being a PAYE worker my whole life. I'd never been to the ATM so often as that week.

jjnz1

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#3397945 29-Jul-2025 09:53

Handsomedan:
You've clearly not read anything other than spin from the retailers assn and some vague headlines.
See my earlier post - regulation has been happening for a while and Paywave fees are very small.
Further regulation has just been put in place, so maybe have a read.

Whoa soften your words mate.. This is a place of learning, collaboration, and discussion. The benefit of a place like this is to discuss others points of view, and compare to your own, to make a better informed decision.

A few points in my opinion:

EFTPOS and Paywave use the same terminals
Retailers have the option of purchasing or leasing their terminals, and the price difference is negligible between contactless and non-contactless. (contactless terminals are (one-off) $200-$700 more expensive to purchase than non-contactless)
EFTPOS is routed via Banks/EFTPOS servers?, debit/credit is routed via Visa/Mastercard servers
EFTPOS has 0% interchange fees.
Debit Card via inserted/swiped (via Visa/Mastercard routing) has 0% interchange/0% MSF
Paywave/Credit has 0.80% interchange fees. This may drop to 0.30% from Dec.
Merchant service fees (MSF) can range from 1.5% to 1.99% for non EFTPOS - this can include interchange fees. Post Dec this may drop to 1-1.3%.
Foreign cards have additional fees
Credit card and Paywave (credit) transactions incur higher interchange/MSF due to rewards and fraud coverage (debatable)

Based on the above information, I have the following questions:

Debit card contactless SHOULD be 0% interchange fees /0% MSF - why is it not?
Does rewards and fraud coverage really cost Visa/Mastercard 0.8% interchange fees on top of the interest rates they charge (13.99-21.99%).
How does the AU model work?

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#3397950 29-Jul-2025 10:04

Credit Card Merchant fees are complex; probably by design.

However it is widely known that debit cards are 0% - for EFTPOS debit cards only and not scheme debit cards that run on the Credit card company payment rails.

jjnz1

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#3397951 29-Jul-2025 10:08

From what I can find debit card Paywave (via contactless) will be unaffected by the proposed change, and is currently at 0.2% interchange fees, / ~0.7% MSF.

jjnz1

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#3397952 29-Jul-2025 10:13

Asteros:

Credit Card Merchant fees are complex; probably by design.

However it is widely known that debit cards are 0% - for EFTPOS debit cards only and not scheme debit cards that run on the Credit card company payment rails.

Yeah I think so. But EFTPOS debit can't do contactless from my understanding. For contactless/Paywave you need a VISA/Mastercard scheme Debit.

Asteros

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#3397953 29-Jul-2025 10:13

Yes that's correct because contactless debit cards run on the scheme networks so they are subject to merchant acquiring fees.

mattwnz

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#3397955 29-Jul-2025 10:26

Handle9:

The article says nothing about bank fees which is what you originally alleged. It talks about retailers over charging not banks.

it states this.

Reducing interchange fees is expected to save businesses around $260 million per annum.

So who charges the interchange fees and why are they being reduced? Business i have heard have stated they are just passing on the costs, and I understand they already can’t charge more than a certain %

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mattwnz

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#3397956 29-Jul-2025 10:31

jjnz1:

I support the end game here, but have mixed feeling about the way it is being implemented.

Why aren't they targeting the banks and credit card companies to lower fees for paywave also, to make it easier to retailers to absorb the fees?

Does anyone else see a massive risk here that retailers (dairy's for example) will just turn off the ability to pay via credit card and paywave?

I fear this will send us back even further.. 🤦‍♂️

It seemd to be a more recent thing that businesses have been adding on these fees Have their costs increased when they started adding them on? I don’t use payWave anyway if they as on a fee, eftpos is just as easy and quick to use tbh

coffeebaron

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#3397958 29-Jul-2025 10:45

jjnz1:

Yeah I think so. But EFTPOS debit can't do contactless from my understanding. For contactless/Paywave you need a VISA/Mastercard scheme Debit.

Yep and that's the issue. If the EFTPOS system had upgraded to a contactless compatible system way back when contactless first came out, we would not be here today. But I guess since they make way more money clipping the ticket via the credit card system (that all contactless payments work through), there is no incentive to upgrade the EFTPOS system. I'd say many retailers will just drop credit cards / contactless payments and go back to purely swipe & insert EFTPOS if this goes through.

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jjnz1

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#3397961 29-Jul-2025 10:56

coffeebaron:

Yep and that's the issue. If the EFTPOS system had upgraded to a contactless compatible system way back when contactless first came out, we would not be here today. But I guess since they make way more money clipping the ticket via the credit card system (that all contactless payments work through), there is no incentive to upgrade the EFTPOS system. I'd say many retailers will just drop credit cards / contactless payments and go back to purely swipe & insert EFTPOS if this goes through.

Yeah, that is a big risk IMO. For me I don't actually mind the current model of paying a percentage for convenience, especially because I don't carry around a wallet but instead only have my phone with Paywave.

I have walked out of cafe's and dairy's before, simply because I only had Paywave. (before I had ordered something). Funny enough, fast forward 6 months, and those same establishments now have Paywave.

I guess I support lowering the cards fees due to principle. I assume Visa/Mastercard are like big oil/ big pharma, and abusing their duopoly.

Handle9

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#3397978 29-Jul-2025 11:21

mattwnz:

Handle9:

The article says nothing about bank fees which is what you originally alleged. It talks about retailers over charging not banks.

it states this.

Reducing interchange fees is expected to save businesses around $260 million per annum.

So who charges the interchange fees and why are they being reduced? Business i have heard have stated they are just passing on the costs, and I understand they already can’t charge more than a certain %

If you don’t understand how interchange fees work perhaps you could find out? It’s really not that hard to get a basic understanding before making blanket statements that are demonstrably wrong.

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