2026 Surcharge Ban: Guide for NZ Businesses

By EFTPOS NZ September 10, 2025 5 minutes read time

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New Zealand’s government is moving to ban most surcharges on in-store card payments. The Retail Payment System (Ban on Merchant Surcharges) Amendment Bill passed its first reading on 16 September 2025 and is now with the Finance and Expenditure Committee. Public submissions closed on 11 October 2025, and the committee is due to report back by 16 January 2026.

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Kiwi shoppers currently pay up to $150 million a year in surcharges, with about $65 million of that considered excessive. The Bill proposes a ban on surcharges on any in-person payments processed through EFTPOS, Visa, or Mastercard in New Zealand. The Minister has signalled a one-month implementation window once the law passes, with the ban in place by May 2026 at the latest. The Government cites potential savings to shoppers and a cleaner checkout experience as reasons for the ban, and notes that lower interchange fees coming in 2025 and 2026 will help businesses absorb costs

This guide outlines what transactions are affected, the expected timeframe, and what it means for your business.

What changes now?

Surcharging is still legal under the current rules. Eftpos NZ will keep your payment system compliant and give you plenty of notice before anything changes. We're also exploring how to support any allowed surcharges under the new law, so you can recover costs where possible

What types of payments will the ban cover?

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If passed in its current form, the ban will apply to most in-person card payments using NZ-issued or foreign-issued Visa and Mastercard cards, including debit, credit, and commercial, and domestic EFTPOS. In short, if a customer taps, inserts, or swipes a card in-store on the EFTPOS, Visa or Mastercard networks, you won’t be able to add a surcharge.

What's not affected?

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You may still be able to surcharge the following, as they are excluded from the proposed ban:

Online card payments
Payments on other networks such as American Express or Diners Club

These exclusions come directly from the Minister’s first-reading statement. Final details could still change during the select committee process.

ACT’s proposed amendment

ACT commerce and consumer affairs spokesperson Dr Parmjeet Parmar has asked the select committee and the Minister to consider a targeted amendment to the Bill. Their proposal would allow surcharges for credit card payments only when customers have a free alternative available, such as cash or inserting or swiping a card. Retail NZ has publicly backed this approach as a way to keep flexibility for businesses.

Timeline: What to expect

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16 Sep 2025 First reading agreed, Bill sent to the Finance and Expenditure Committee
11 Oct 2025 Public submissions closed
1 Dec 2025 New and revised domestic interchange caps apply
16 Jan 2026 Committee report due back to the House
1 May 2026 New Interchange caps for foreign-issued cards apply
Implementation of the ban Government intends a one-month transition after the law passes, and wants the ban in force by May 2026 or earlier

Interchange fee caps

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The proposed surcharge ban follows earlier work by the Commerce Commission to lower interchange fees — the behind-the-scenes charges paid between banks on every card transaction. These fees are a major part of the cost that merchants recover through surcharging.

From 1 December 2025, domestic card interchange fees will be capped at 0.20% for contactless debit (EFTPOS remains $0) and 0.30% for credit card transactions in person.
Foreign-issued cards will be capped from 1 May 2026 at around 0.60–0.70% for in-person transactions and ~1.5% for online credit card payments.

The Commerce Commission estimates total annual savings of up to $90 million for businesses one the caps are in place. An average small business is estimated to save about $500 annually.

What consumers and businesses are saying

Consumers - Groups like Consumer NZ are pleased about the proposed changes. They’ve campaigned against high surcharges for years, and see this as a win for fairness.
Small businesses - Some are concerned about losing the ability to pass on costs, especially in tight-margin sectors. Industry groups will likely push for adjustments during the Bill’s review. Retail NZ supports ACT’s proposed amendment.
Card networks - Visa and Mastercard support the change. They say lower fees and simpler checkouts benefit everyone.
Charities and exceptions - Some groups, like hospice shops, may seek exemptions due to tight budgets and fundraising needs. These will be debated during the Bill process.

What should you do now?

Model the impact. Use Verifone Central to report how much you currently collect through surcharges so you can plan for pricing adjustments. Learn how to create a surcharge reporting template here.
Check your pricing model. To benefit from the new caps, your merchant service fees should be variable where possible. Fixed-rate bundles won’t automatically reflect lower interchange. Confirm with your Merchant Services provider (usually your bank). Learn more about the benefits of bank-backed variable pricing models here.
Stay up to date We’ll keep you posted as the law progresses. Once the Bill is passed, we’ll let you know what changes to make and when. Subscribe to our newsletter here.

Looking ahead

Most in-store surcharges will likely be gone by May 2026. We’ll keep you informed at every step! We're here to help you stay compliant, plan ahead, and make the most of lower payment fees.