The Commerce Commission is working on new regulations that could change how much businesses like yours are charged for accepting card payments. One key part of this is the interchange fee, a portion of the fee you pay to your bank when a customer uses a credit card or taps their debit card or smart device to pay. The Commission is expected to release a draft decision on this in December.
What Are Interchange Fees?
When your customers pay using "scheme" (e.g. Visa or Mastercard) credit cards, contactless debit cards and smart devices, your bank (the "acquirer") pays a fee to the customer’s bank (the "issuer"). This fee is called an interchange fee, and it’s part of the total cost of processing these transactions. Your bank passes this cost on to you through what's known as a "merchant service fee." These fees can quickly add up, especially for businesses that process a high volume of card payments.
The goal of the Commerce Commission’s work is to reduce these interchange fees to lower costs for businesses like yours. They’ve gathered feedback on how interchange fees affect businesses and consumers, and they’ll use this information to make a decision later this year.
Why is this important?
Lower interchange fees could mean lower costs for your business. Right now, these fees can take a big bite out of your profits, especially for small businesses. By regulating interchange fees, the Commerce Commission aims to make accepting card payments cheaper and fairer for businesses, which could help improve your bottom line.
What’s next?
The Commerce Commission is reviewing feedback and is expected to make a draft decision in December 2024. The final decision will come sometime after that, and any changes could take effect in 2025. Visit the Commerce Commission’s website for updates and details about the consultation process. We’ll also keep you informed as this process moves forward, so you can stay on top of any changes that might impact your business.
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