This guide explains how EFTPOS, debit, contactless, and credit card payments are priced in New Zealand, why costs vary by payment type, and what businesses should understand as surcharging rules evolve.
Most in-store payments fall into these buckets:
EFTPOS
Inserted or swiped Debit cards
Contactless Debit cards
Credit card
Online card payments
Other options include international cards, commercial cards, or buy now, pay later
Each one costs a different amount to accept.
EFTPOS payments do not attract a merchant service fee per transaction.
An EFTPOS card is designed for in-person payments and is used at a physical terminal. The card is swiped, not inserted, and the cardholder enters a PIN and selects cheque or savings to complete the transaction.
EFTPOS cards generally cannot be used online, overseas, or in digital wallets. Payments are processed through New Zealand’s domestic EFTPOS network.
There’s no per-transaction percentage taken from the sale. But businesses still pay for things like:
terminal rental
network fees
SIM fees
EFTPOS continues to be widely used in New Zealand, particularly for in-person payments, and remains an important low-cost option for many businesses.
Inserted or swiped debit card payments do not attract a merchant service fee.
A debit card has a Visa, Mastercard, or other scheme logo on it. It can be used in store, online, over the phone, and overseas. Debit cards also support contactless payments and can usually be added to digital wallets on phones and other smart devices. These payments are processed through international card networks and often come with additional security features.
When a customer inserts or swipes a debit card, there is no merchant service fee. From a cost point of view, this is similar to EFTPOS.
Contactless debit usually attracts a merchant service fee.
Contactless debit is when a customer taps a debit card, phone, or watch on the terminal instead of inserting the card and entering a PIN.
Even though the money still comes straight from the customer’s bank account, the payment is processed through international card networks, not the domestic EFTPOS network. Because of this, contactless debit usually attracts a merchant service fee. Typical rates are around 0.7%, though this varies by provider and pricing plan.
For many businesses, contactless debit makes up a significant share of in-store transactions. Even small differences in how these payments are priced can have a meaningful impact on total fees over time.
Credit cards are typically the most expensive in-store payment type for businesses to accept.
Domestic credit card fees are commonly 1.5% to 2%. International and commercial cards are often higher again.
These higher costs come from:
interchange fees set by the card schemes
processing and scheme fees
the margin charged by your payment provider (usually your bank)
Online payments generally cost more than in-person payments.
That’s because:
fraud risk is higher
extra security and processing steps are required
Rates depend on your provider, the card type, and whether the card is domestic or international.
A merchant service fee is the fee you pay your payment provider for accepting certain card payments. It’s usually charged as a percentage of the transaction value or sometimes a small per-transaction amount.
You do not pay a merchant service fee for:
EFTPOS
debit cards that are inserted or swiped
Two businesses can accept the same cards and still pay very different fees. That’s usually down to pricing structure.
Blended pricing charges the same rate for different card types, regardless of their actual cost.
Blended pricing means:
one or a few flat rates
less transparency
easier to understand at a glance
The downside is you often pay more than necessary, especially if most of your customers use lower-cost payment types. With blended pricing, lower-cost payments like EFTPOS and inserted debit effectively subsidise higher-cost payments, because everything is charged at the same rate.
Interchange-plus pricing separates the card scheme fee from the provider’s margin, making underlying costs more visible.
Interchange-plus pricing breaks costs into:
the interchange fee set by the card networks
a clear margin charged by your provider
This structure is usually cheaper for most merchants, especially as volumes grow, but it takes more effort to understand. While individual transactions vary, interchange-plus pricing makes it easier to see exactly which payment types are driving your costs.
Interchange fees are set by card schemes and can change over time. These changes are outside the control of banks and payment providers, but they can affect what businesses ultimately pay to accept certain card payments.
When interchange fees increase or decrease, those changes may flow through to merchants depending on their pricing structure and the types of cards their customers use.
This is one reason it’s important to understand how your payments are priced. Some pricing models make changes more visible, while others absorb them into a single rate, making it harder to see what’s driving your costs.
We’ve explained recent interchange fee changes, and what they could mean for businesses, in more detail here: Interchange fee changes: what they mean for your business
Your effective merchant service fee shows the true average cost of accepting card payments across your business. You calculate it like this:
Total merchant service fees
÷
Total card sales= Your effective rate
Tracking your effective merchant service fee over time can also help you spot changes driven by shifts in card mix or interchange fee updates. This number is especially useful when comparing flat-rate offers, where the advertised percentage doesn’t always reflect what you would pay under a more granular pricing model.
A single blended rate can feel simpler, but simplicity doesn’t always mean lower cost.
If your business accepts EFTPOS, inserted debit, and contactless debit, a flat rate means you pay the same percentage for payments that actually cost very different amounts to process.
Over time, this can push your effective fee higher than expected, especially if fee-free or low-cost payments make up a meaningful share of your transactions.
Some New Zealand businesses currently surcharge to recover the additional cost of certain card payments, but this may change.
Under current rules, surcharges must:
be clearly shown before payment
not exceed the additional cost of that payment method
leave at least one payment option with no surcharge
For many in-store businesses, that no-surcharge option is EFTPOS or inserted debit.
However, card payment surcharging may be banned in New Zealand as early as 2026. If surcharging is restricted or removed, businesses will need to rely more heavily on:
understanding their underlying payment costs
choosing the right pricing structure
encouraging lower-cost payment methods where possible
A few practical steps that often help:
Know your mix: Look at how customers actually pay. Small shifts make a big difference.
Check your pricing plan: If your business has grown, your rates may no longer be competitive.
Ask about interchange-plus: Especially if you process a lot of debit or domestic cards.
Promote lower-cost options: Clear signage and staff prompts to encourage customers to choose low cost options.
Review regularly: Payment costs change over time. Don’t set and forget.
The bottom line
Not all payments cost the same.
Not all pricing plans are equal.
And not all fees are unavoidable.
Understanding how each payment type is priced puts you in a stronger position to choose the right setup, price fairly, and protect your margins.
With payment fees and surcharging rules evolving, now’s a good time to understand how your payments are really priced. Learn what the proposed surcharge ban could mean for your business, read our guide to the proposed surcharge ban.