Commerce Commission considers action against high paywave fees

Some merchants have failed to pass on paywave and other card fees to consumers, despite recent laws limiting fees to much lower rates, according to the Commerce Commission. are considering taking action.

Retail Payment Systems Act, Enforced in Novemberlimits exchange fees between banks and card companies, passing the savings on to consumers.

However, consumers were being charged 2 or 3% on purchases paid using Paywave in many shops, despite a cap of 0.2% of the transaction value, or a flat fee of 5 cents. rice field.

The Commerce Commission said it had received four complaints about excessive surcharges for transactions since the law took effect in mid-November.

In one recent instance, a merchant applied a paywave surcharge of 54 cents or 2.5% on a $21.50 purchase.

Contact debit payments will continue to be fee waived, but all credit card payments will be limited to 0.8% of the transaction value and online transactions using debit cards will be limited to 0.6%.

Commission Chairman John Small said, “These reductions are worth noting and will allow merchants charging extra fees for the use of Visa and MasterCard to pay less than they have in the past. As such, we certainly expect those cuts to carry over,” he said.

He said the commission is in discussions with payment providers about communicating with businesses about price drops.

“We are in the midst of a campaign to try to raise merchant awareness and collect information from merchants about what they are doing,” he said.

Retail NZ chief executive Greg Harford said some merchants may not yet be aware of the changes.

“That means most retailers don’t charge extra. It’s more common in hospitality, ticketing and tourism,” Harford said.

“But if you’re charging additional fees to do business with your customers, that’s certainly important. Make it clear that those additional fees cover the costs you’re incurring and nothing more. is needed.”

Small said there is no law prohibiting merchants from applying surcharges to cover transaction fees, but the commission expected it to be reasonable.

“We have the authority under the law to introduce rules that the additional charges must be commensurate with the cost.

“We haven’t done that yet, as we’re still gathering information. But if there’s a continuation of the surcharge at a level that far exceeds the cost, it’s certainly a strong option.”

Small said consumers should inform the commission of excessive surcharges.

“I think it will take months to figure out exactly what the pattern is and convince merchants through other means, such as trade associations and our own campaigns.

“But I have no doubt it will move soon after that if needed.”

Harford said the commission also needs to check whether banks are passing on savings in interchange fees.

“There are doubts as to whether banks have properly considered the new regulatory framework and adjusted their fees,” he said.

“Regulators need to watch closely to see exactly what’s going on.”

The Bankers Association said banks take regulatory compliance very seriously.

“Banks also operate in highly competitive markets and work hard to attract and retain customers,” said CEO Roger Beaumont.

“We recommend that merchants who are concerned about fees consult their bank.”

Commercial credit cards were exempt from regulation, some with interchange fees as high as 2.25%.