Summary
- EFTPOS, and debit cards that are inserted or swiped, carry no merchant service fee
- Contactless debit (a tap) usually does, at around 0.7%
- Credit cards are the priciest, commonly 1.5% to 2%, and higher again for international and commercial cards
- Eftpos NZ does not charge merchant service fees. Your acquirer, usually your bank, does
- How your pricing is structured, blended or interchange-plus, can matter as much as how your customers choose to pay
How do New Zealanders pay?
Most in-person payments fall into a handful of buckets: EFTPOS, debit cards with a chip that are inserted, contactless debit, and credit cards. Retailers will also encounter the occasional international card, commercial card, or buy now, pay later. Each one costs a different amount to accept, and that difference shows up on your merchant service fee statement. A merchant service fee is what you pay your provider for accepting certain card payments. It is usually a percentage of the sale, sometimes a small flat amount per transaction. Eftpos NZ does not charge a merchant service fee on transactions. Those fees are set and charged by your acquirer, usually your bank, or by a third party such as American Express.
What does each payment type cost?
EFTPOS: no merchant service fee
EFTPOS payments do not attract a merchant service fee per transaction.
An EFTPOS card is built for in-person paying. It is swiped rather than inserted, the customer enters a PIN and picks cheque or savings, and the payment runs through New Zealand's own domestic EFTPOS network. EFTPOS cards generally can't be used online, overseas, or in a digital wallet. No slice of the sale is taken as a percentage. You'll still pay for terminal rental, network fees, and SIM fees.
Inserted or swiped debit: no merchant service fee
Debit cards that are inserted do not attract a merchant service fee either.
A debit card carries a Visa, Mastercard, or other scheme logo. It works in-store, online, over the phone, and overseas, supports contactless, and usually loads into a digital wallet. But when a customer physically inserts it, the cost to you looks much like an EFTPOS card: nothing per transaction.
Contactless debit: usually around 0.7%
Contactless debit does attract a merchant service fee.
Here is the part that catches people out. When a customer taps a debit card, phone, or watch, the money still comes straight out of their bank account, exactly as it would if they inserted it. But the payment is processed by the international card scheme instead, and that is what brings the fee. Typical rates sit around 0.7%, though this varies by provider and plan. For a lot of businesses, 'paywave' or contactless is now the default. So even a small difference in how contactless debit is priced adds up over a year.
Credit cards: commonly 1.5% to 2%
Credit cards are usually the most expensive card payments to accept in store.
Domestic credit sits around 1.5% to 2%. International and commercial cards often run higher again. That cost is built from three things: interchange fees set by the card schemes, processing and scheme fees, and the margin your provider adds on top.
Online payments: higher again
Card payments taken online generally cost more than the same payment in person.
The reasons are straightforward. Fraud risk is higher, and more security and processing sits behind each transaction. What you actually pay depends on your provider, the card type, and whether the card is domestic or international.
Why do two similar businesses pay different fees?
Two shops can accept the same cards and still end up with very different bills. Usually that comes down to how their pricing is structured. There are two common models:
Blended pricing
Blended pricing charges one rate, or a few, across different card types, regardless of what each actually costs to process.
It is easy to read at a glance, which is the appeal. The catch is that low-cost payments end up subsidising high-cost ones. If a good share of your customers pay by EFTPOS or inserted debit, blended pricing means you are often paying more than you need to, because those cheap payments are charged at the same rate as the expensive ones.
Interchange-plus pricing
Interchange-plus pricing splits the cost in two: the interchange fee set by the card schemes, and a clear margin from your provider.
It takes a bit more effort to understand, but it shows you exactly which payment types are driving your costs. For most merchants it works out cheaper, and the advantage tends to grow with volume, especially if you process a lot of debit or domestic cards.
Why interchange fees move over time
Interchange fees are set by the card schemes, not by your bank or provider, and they change from time to time. When they do, the impact on your bill depends on how you are priced and on the mix of cards your customers use.
This is one more reason to understand your pricing. Some models make a change like this visible straight away. Others fold it into a single blended rate, where it is much harder to see what shifted. We have covered the recent interchange changes, and what they mean for businesses, in more detail here: Interchange fee changes: what they mean for your business.
How do you work out your effective merchant service fee?
Your effective merchant service fee is the true average cost of taking card payments across your whole business. Here is the math:
Total merchant service fees ÷ Total card sales = Your effective rate
Track that number over time and you will spot when your costs move, whether that is from a change in card mix or an interchange update. It is also the figure to reach for when you are weighing up a flat-rate offer, because an advertised percentage rarely reflects what you would actually pay once the full mix is counted.
Why one flat rate isn't always the cheaper deal
A single blended rate feels tidier, but tidy and cheap are not the same thing. If your business takes EFTPOS, inserted debit, and contactless debit, a flat rate charges the same percentage across payments that cost very different amounts to process. Over a year, that can push your effective fee higher than you would expect, particularly when fee-free and low-cost payments make up a real chunk of your takings.
How to bring your payment costs down
A few practical moves that tend to help:
- Know your mix. Look at how your customers actually pay. Small shifts make a real difference.
- Check your plan. If your business has grown, the rates you signed up for may no longer be the sharpest available.
- Ask about interchange-plus. Especially if you process a lot of debit or domestic cards.
- Nudge lower-cost options. Clear signage and a quick prompt from staff can steer customers towards cheaper ways to pay.
- Review regularly. Payment costs move. Don't set and forget.
The bottom line
Not all payments cost the same. Not all pricing plans are equal. And not every fee is unavoidable.
Once you understand how each payment type is priced, you are in a far stronger position to pick the right setup, price fairly, and protect your margins.
Payment fees FAQs
Why do payment fees vary between payment types?
Because different payments travel through different networks. EFTPOS and inserted debit can run through New Zealand's domestic EFTPOS network with no merchant service fee. Contactless and credit go through the international card schemes, which carry interchange and scheme fees that get passed on to you.
Are EFTPOS transactions free for merchants?
There is no merchant service fee on an EFTPOS transaction, so no percentage is taken from the sale. It isn't entirely free, though. You still pay for terminal rental, network fees, and SIM fees. But per transaction, EFTPOS remains one of the lowest-cost ways to take a payment in New Zealand.
What's the difference between EFTPOS and debit cards?
An EFTPOS card runs on New Zealand's domestic network, is swiped with a PIN, and generally can't be used online, overseas, or in a digital wallet. A debit card carries a Visa or Mastercard logo, works in store, online, and abroad, and supports contactless. Inserted, both cost you nothing per transaction. Tapped, a debit card usually attracts a fee.
Why does contactless debit cost more than inserting the card?
Same card, same money out of the same account, but a different processing path. New Zealand's domestic EFTPOS network doesn't support contactless payments, so a tap is routed through the international card schemes instead which incurs a fee, typically around 0.7%. Inserted with a PIN, the same card can avoid that fee.
What is a blended payment rate?
A blended rate charges the same percentage, or one of a few flat rates, across different card types, regardless of what each costs to process. It is easy to read, but it means low-cost payments like EFTPOS and inserted debit end up subsidising higher-cost ones, so you often pay more than you need to.
Can businesses still surcharge card payments in New Zealand?
A business can surcharge card payments to recover the cost of accepting them, provided the surcharge is reasonable and reflects the actual cost. Surcharging is regulated under the Retail Payment System Act. Surcharging has been under active review, however it remains legal in New Zealand.
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