Consumer NZ is calling on New Zealanders to stand up to excessive surcharges on credit and debit card payments.

The non-profit is on a mission to arm shoppers with information about what constitutes a reasonable surcharge.

The Retail Payment System Act, which passed into law in November 2022, led to lower costs for businesses accepting card payments.

This change was expected to save businesses $105 million a year and mean lower surcharges for customers too. Consumer is concerned these savings aren’t always being passed on. 

“Businesses shouldn’t charge their customers more than what it costs them to accept a card payment. Unfortunately, as shoppers, we have no way of telling what businesses are getting charged so it’s difficult to tell if we’re being ripped off,” says Consumer NZ campaigns manager Jessica Walker.

If you insert or swipe a debit or Eftpos card when paying in person, you should not incur a surcharge.

However, if you make a contactless payment with a debit card (by tapping it or using it online) you could incur a surcharge, but that fee generally shouldn’t be more than one per cent.

If you pay by credit card, you shouldn’t generally be charged more than 2.5 per cent. In many cases, you should be charged less than 2.5 per cent. 

Retailers should not be profiting from surcharges, but Consumer is concerned many are.

“Big businesses usually pay lower fees for accepting card payments because of the volume of transactions they process, and this should be reflected in the surcharge passed on to the customer. If, for example, you pay your power bill by credit card, you’re only likely to have to pay a surcharge of around one per cent, or less. 

“This lower surcharge is good to see, but the same can’t be said for all businesses.”

For example, earlier this year Consumer received numerous complaints about Ticketek, a big player in the event ticket market, which at the time was charging a payment processing fee of up to 3.5 per cent. 

“We asked Ticketek why its payment processing fee was so high? Ticketek told us it had reduced its surcharge to a standard three per cent and would lower it further. However, we’re still receiving complaints about Ticketek charging 3.5 per cent. We think this is excessive.

“In our view anything higher than a 2.5 per cent credit card surcharge, or a one per cent contactless debit card charge could be excessive.”

Whenever a retailer is applying a surcharge, it must be clearly displayed, and retailers should offer at least one payment method that does not incur a surcharge.

It has been a year since the law changed, and according to Consumer, there is no excuse for businesses continuing to charge customers excessive surcharges.