Surcharges will be axed to put money back in Kiwis’ pockets, Commerce and Consumer Affairs Minister Scott Simpson said on Monday.

“Surcharges are a hassle and an unwelcome surprise when shoppers get to the till. That pesky note or sticker on the payment machine will become a thing of the past.

“We’re banning surcharges so consumers can shop with confidence knowing how much they will pay for their purchases."

Simpson said New Zealanders are paying up to $150 million in surcharges every year, including excessive surcharges of up to $65 million.

"That’s money that could be saved or spent elsewhere."

In the United Kingdom and across the European Union, surcharges for debit and credit cards for designated schemes are banned.

Australia currently has surcharging on debit and credit cards, but this must be no more than the cost to retailers of accepting these cards. The Reserve Bank of Australia has recently proposed banning surcharges altogether for EFTPOS and Visa and Mastercard debit and credit cards. 

“By May 2026 at the latest, we will ban surcharges for in-store payments," Simpson said.

"Shoppers will no longer be penalised for their choice of payment method, whether that’s tapping, swiping or using their phone’s digital wallet.”

The ban follows the Commerce Commission decision to reduce interchange fees paid by businesses to accept Visa and Mastercard payments, a move to save businesses around $90 million a year.

“Surcharges cover the fees businesses pay for accepting contactless payments and credit cards, but we know these are often excessive," Simpson said.

“In some cases, the retailer doesn’t even make it clear what the percentage is.

“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. It means they can make a purchase knowing exactly what they’ll pay, and how they’ll pay it.”

The Retail Payment System (Ban on Surcharges) Amendment Bill is expected to be introduced by the end of this year. The ban will apply to most in-store payments made using domestic Mastercard, Visa debit, credit cards and EFTPOS.

Transactions through the Visa and Mastercard networks and by EFTPOS are the main method of card payment in New Zealand.

The Commerce Commission estimates New Zealanders pay about $150 million in surcharges annually including $45-$65 million in excessive surcharges. The Commerce Commission has already announced lower interchange fees paid by businesses to accept Visa and Mastercard payments. Interchange fees make up approximately 60 per cent of merchant service fees.