Interchange fee caps in New Zealand: what changed and what it means for your business

The Commerce Commission has capped interchange fees on most Visa and Mastercard transactions processed in New Zealand. Caps on NZ-issued credit cards took effect from 1 December 2025, reducing in-person rates from around 0.8% to 0.3% of the transaction value. Caps on foreign-issued cards came into force from 1 May 2026 - the first time overseas card Interchange fees have been regulated in New Zealand.

What is an Interchange Fee?

When a customer pays with a credit or contactless debit card, you pay a Merchant Service Fee (MSF) to your merchant services provider, usually your business bank. A typical MSF has four components: Interchange Fees, Scheme Fees, Network Fees, and Acquirer Fees.

Interchange fees are the largest component. They represent the amount your bank (the 'acquirer') pays to your customer's bank (the 'issuer'). The rate is set by the card schemes — Visa and Mastercard — not by your bank. It is essentially a reimbursement to the issuing bank for providing the card used in the transaction.

Which transactions attract Interchange fees in New Zealand?

Not every card payment incurs interchange fees. It depends on the card type and how the payment is made.

Traditional EFTPOS payments — where a customer swipes their card and selects Cheque or Savings — attract no Merchant Service Fees. This is unique to the New Zealand payments network.

What changed from 1 December 2025?

New Zealand first capped interchange fees in 2022. From 1 December 2025, the Commerce Commission reduced those caps further for NZ-issued cards. The most significant change was for in-person credit card transactions, where the cap dropped from around 0.8% to 0.3%.

If you accept credit or contactless payments from NZ cardholders, you should now be seeing lower Merchant Service Fees. You should have seen the first difference in your January 2026 statement. If you did not, contact your merchant services provider.

What changed from 1 May 2026 for foreign-issued cards?

From 1 May 2026, the Commerce Commission introduced interchange fee caps on foreign-issued Visa and Mastercard transactions for the first time. Previously, there were no limits on what could be charged when an overseas cardholder paid at a New Zealand business.

In short:

• In-person credit card fees dropped the most from December 2025
• Debit and EFTPOS fees are unchanged — they were already low or zero
• Foreign card fees are now capped for the first time
• Commercial (business) credit cards and prepaid cards remain uncapped for now

What about commercial credit cards and prepaid cards?

Interchange fees on commercial (business) credit cards — both NZ-issued and foreign-issued — remain uncapped. The Commerce Commission has noted these fees appear high and has indicated they will continue to monitor them. Domestic prepaid cards are also currently uncapped. This gives newer payment providers and fintechs space to operate while building their customer base.

How much could your business save?

The Commerce Commission estimates the December 2025 changes will save New Zealand businesses around $100 million per year. For a small business processing approximately $330,000 in Visa and Mastercard sales annually, the average saving is around $500 per year — with some businesses saving considerably more depending on their card mix.

Businesses most likely to benefit:

• High credit card volume — you will see the biggest reduction from the December 2025 caps
• Regular international customers — you will see more predictable costs now that foreign card fees are capped
• Mostly debit or EFTPOS — your costs will stay about the same, as these were already low

Do interchange fee caps affect surcharging?

A surcharge is a fee businesses can charge customers to recover the cost of card acceptance. Under New Zealand law, surcharges must reflect the actual cost of processing the transaction — they cannot exceed your Merchant Service Fee.

Because Interchange fees are now lower, your actual cost of acceptance has likely reduced. If you apply a surcharge, you may need to review and reduce your rate to ensure it still reflects your actual costs.

The Retail Payment System (Ban on Merchant Surcharges) Amendment Bill  has now stalled while the Government considers the wider implications. At this stage, no changes have been confirmed. We’ll continue to monitor the situation and support merchants with any updates.           

What to do next

Check your statements. Lower fees for NZ-issued card transactions should have been visible from January 2026. Lower fees for foreign-issued card transactions should appear from June 2026 onwards. If you are not seeing reductions, contact your merchant services provider.