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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#3398086 29-Jul-2025 16:54

TwoSeven:

Personally, I just want it easier to make payments and I don't want to see surcharges and costs listed all over the place. I don't really care about the excuses for why that isn't possible.

Yip, and TBH the reduction in transaction friction outweighs the potential of retailers slipping 1-2% onto certain product lines ( or simply eating the charge from their margin)..

Travelling in Europe without visible contactless surcharges was a huge change from what we currently have here...

mattwnz

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#3398088 29-Jul-2025 17:10

gzt: / for the record I do have credit cards and also throw shade on reward schemes, nearly all of which annoy me for multiple reasons don't get me started.. ; ).

I have a small cashback reward scheme with the debit card I have. I use it to pay council rates, as they don't currently have any surcharge, which means I essentially get a bit of a discount on my council rates. I would be stupid not to take that up. Even though other ratepayers who pay using direct credit via their bank are essentially subsidizing that cashback for me.

johno1234

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#3398092 29-Jul-2025 18:18

Handsomedan:

Visa Contactless interchange is 0.65% for standard cards, 0.80% for Platinum/Premium cards
Debit Card interchange is 0.20%.

That's not a massive amount to absorb, by comparison to the other costs of sale for the average retailer. Why charge cardholders 2.5% for something that costs less than 1%?
Because they are recovering the cost of everything surrounding that payment - network fees, terminal rental, bank margin (usually a fraction of a %).

Thanks for the explanation. Why does contactless cost different to swiped or chipped? Is it not the same once it leaves the terminal?

It is a lot to absorb if your percentage is over a large transaction - say a group business dinner of several thousand dollars.

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#3398096 29-Jul-2025 18:37

wellygary:

Travelling in Europe without visible contactless surcharges was a huge change from what we currently have here...

In Dubai and Europe I pay with my phone for everything down to a 40c bottle of water. New Zealand is a real outlier.

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#3398098 29-Jul-2025 18:50

johno1234:

Thanks for the explanation. Why does contactless cost different to swiped or chipped? Is it not the same once it leaves the terminal?

It is a lot to absorb if your percentage is over a large transaction - say a group business dinner of several thousand dollars.

As already mentioned, contactless goes via the credit card system with applicable merchant fees. Swipe or insert with PIN and selecting your bank account goes through the EFTPOS system with no per transaction fee.

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#3398102 29-Jul-2025 19:04

coffeebaron:

johno1234:

Thanks for the explanation. Why does contactless cost different to swiped or chipped? Is it not the same once it leaves the terminal?

It is a lot to absorb if your percentage is over a large transaction - say a group business dinner of several thousand dollars.

As already mentioned, contactless goes via the credit card system with applicable merchant fees. Swipe or insert with PIN and selecting your bank account goes through the EFTPOS system with no per transaction fee.

That's not what I was talking about. What about swipe or insert with PIN and select credit card? Why does that cost less than Paywave? Naturally there are costs to credit cards - cost of interest if the merchant is settled before the credit card holder pays into his account, and the cost of bad debts, silly loyalty programs etc. But that is all the same whether Paywave or not.

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mattwnz

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#3398108 29-Jul-2025 20:38

Thinking about this mine, I do wonder if this move by the government is a way to make eftpos less relevant. I understand it is old technology and not as secure and solely relies on a magnetic stripe and pin. I have found my bank has been pushing debit cards as a replacement payment option and I didn’t even get sent a replacement eftpos card when it expired.

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#3398147 30-Jul-2025 07:50

prepare to see a 5% markup for everything whether you use contactless or not.

no reason not to use contactless now that you are going to be charged for it + extras anyway.

you'd know they are definitely not ripping you off if the merchants displays "no paywave" but that is going to be rare.

mudguard

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#3398153 30-Jul-2025 08:25

Batman:

prepare to see a 5% markup for everything whether you use contactless or not.

no reason not to use contactless now that you are going to be charged for it + extras anyway.

you'd know they are definitely not ripping you off if the merchants displays "no paywave" but that is going to be rare.

That's kind of my feeling. I don't care if it costs me more, I just want to see one price and use my phone. My brother came back from the US recently and said it would drive him nuts having to mentally add a percentage each time he went up the check out and see sales tax added.

johno1234

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#3398155 30-Jul-2025 08:28

Batman:

prepare to see a 5% markup for everything whether you use contactless or not.

By who - the merchants?

Bung

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#3398162 30-Jul-2025 08:58

Batman:

you'd know they are definitely not ripping you off if the merchants displays "no paywave" but that is going to be rare.

All you'll know is that retailer is chasing every last cent. Their prices are unlikely to undercut the others.

When bankers crank up the tiny violins and wring their hands about how much it's costing them in 2014 $62B went through eftpos system. Transferring even a % to debit cards must have helped their cost of doing business.

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#3398165 30-Jul-2025 09:12

johno1234:

That's not what I was talking about. What about swipe or insert with PIN and select credit card? Why does that cost less than Paywave? Naturally there are costs to credit cards - cost of interest if the merchant is settled before the credit card holder pays into his account, and the cost of bad debts, silly loyalty programs etc. But that is all the same whether Paywave or not.

It doesn't.
Contactless payments are cheaper than swipe/dip payments
https://www.visa.co.nz/about-visa/interchange.html

From the link.

The above is for standard cards (which most NZers have, but there was a push to Premium/Platinum cards for a while, which do attract slightly higher costs) ,but after recent legislation, there will be significant changes.

From 1st December, Interchange will be significantly lower:
https://comcom.govt.nz/__data/assets/pdf_file/0033/367458/Retail-Payment-System-Mastercard-and-Visa-Interchange-Fee-Network-Standard-2025-17-July-2025.pdf

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

Under the new legislation Interchange will be capped at lower rates for in-person payments (i.e. dipped/swiped) and the following change will be made to those payments:

So a reduction from 0.80% for credit cards to 0.30% with contactless debit remaining the same as it currently is at 0.20%

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#3398213 30-Jul-2025 10:07

mudguard:

Batman:

prepare to see a 5% markup for everything whether you use contactless or not.

no reason not to use contactless now that you are going to be charged for it + extras anyway.

you'd know they are definitely not ripping you off if the merchants displays "no paywave" but that is going to be rare.

That's kind of my feeling. I don't care if it costs me more, I just want to see one price and use my phone. My brother came back from the US recently and said it would drive him nuts having to mentally add a percentage each time he went up the check out and see sales tax added.

It hasn’t proved that way in other parts of the world. It’s a normal cost of doing business and gets wrapped up in SG&A costs.

tanivula

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#3399835 4-Aug-2025 10:52

Heard the bnz ad on the or ol wireless the other day about payap

Looks interesting, QR code scanning, low fees & open banking connections from my initial look.

wellygary

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#3399838 4-Aug-2025 11:16

tanivula:

Heard the bnz ad on the or ol wireless the other day about payap

Looks interesting, QR code scanning, low fees & open banking connections from my initial look.

"Step 4

You’ll both receive confirmation when the transaction has been completed. The funds are settled to your account the next morning."

I think this could be its undoing, retailers don't get the money till overnight,

Presumably its deducted as an "unavailable balance" from the customers as soon as the transaction occur thou - otherwise its a gapping hole for abuse

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