Retail payment system

About the retail payment system

The retail payment system facilitates the transfer of funds from consumers to merchants in exchange for goods and services. The retail payment system is constantly evolving and comprises of various retail payment methods like card products, cheques, cash, bank transfers and, more recently, Buy Now Pay Later products.

Card payments are the most common payment method in New Zealand and comprise of debit (including EFTPOS) and credit card payment products. The card payment system is a complex web of technical infrastructure, arrangements and standards involving a number of intermediaries.

We are focused on:

• ensuring that New Zealand’s retail payment system is operating in the interests of New Zealand consumers and businesses
• facilitating new ways of making payments, and allowing consumers to securely share their banking data with trusted third parties (commonly referred to as ‘open banking’).

Read more about the Government’s work to enable and accelerate open banking in New Zealand:

Open banking

Retail Payment System Act 2022

In May 2022, the Retail Payment System Act was passed. It includes a range of measures to promote competition and economic efficiency in the retail payment system to ensure that it delivers long-term benefits to consumers (including businesses) and merchants.

The Act sets out the following:

• a process and factors to determine what parts of the retail payment system should be designated for regulation
• that the Commerce Commission can issue standards for information disclosure, pricing or access
• that the Commerce Commission can make directions regarding the rules of designated networks
• that the Commerce Commission can regulate merchants’ payment surcharges in order to prevent excessive surcharging
• initial designations of the Mastercard and Visa credit and debit networks
• an initial pricing standard that caps interchange fees for transactions on the Mastercard and Visa credit and debit networks.

The Commerce Commission has found that the initial pricing standard led to $140 million in annual savings for New Zealand businesses. In July 2025, the Commission released its final decision to further reduce interchange fees in the Visa and Mastercard debit and credit networks, which is expected to save New Zealand businesses an additional $90 million annually from December 2025.

Retail Payment System Act 2022(external link) — New Zealand Legislation

More information about the Commerce Commission’s work regulating the retail payment system:

Retail payment system(external link) — Commerce Commission

Retail Payment System (Ban on Merchant Surcharges) Amendment Bill

The Government is moving to ban surcharges for all in-store EFTPOS, Visa and Mastercard debit and credit card payments. The Retail Payment System (Ban on Merchant Surcharges) Amendment Bill will give effect to the ban through an amendment to the Retail Payment System Act 2022.

The Bill proposes a targeted ban that applies to all in-store EFTPOS, Visa and Mastercard debit and credit card payments, including those made contactlessly and via digital wallets. It also applies equally to cards for personal or commercial use, cards issued in New Zealand or overseas, and physical or digital cards.

The Bill proposes:

• to enable the Commerce Commission to enforce the ban
• to provide that consumers are entitled to a refund from the merchant for any surcharge charged in contravention of the ban
• to retain the ability of the Commerce Commission to issue merchant surcharging standards for payments that are not subject to the ban
• regulation-making powers to enable the ban to be extended in future; for example, to online payments or other payment networks (such as American Express or Buy Now Pay Later).

The proposed ban is designed to improve price transparency and the consumer experience at the till. It will also address excessive surcharging practices by merchants, with the Commerce Commission estimating that consumers are paying $45-$65 million annually in surcharges that exceed merchants’ reasonable payment costs.

The Retail Payment System (Ban on Merchant Surcharges) Amendment Bill has been introduced to Parliament. You can follow the Bill, including when submissions are open for the Select Committee process, by visiting the Parliament website.

Retail Payment System (Ban on Merchant Surcharges) Amendment Bill(external link) — New Zealand Parliament Pāremata Aotearoa

Government policy decisions

In April and June 2021, Cabinet agreed to establish a new regulatory regime to:

• require reductions in interchange fees as soon as possible
• enable direct intervention by the Commerce Commission, using a broad suite of powers to regulate different participants, or classes of participants, in the retail payment system. This will ensure the regime is flexible and durable to oversee retail payments for the foreseeable future.

In July 2025, Cabinet agreed to amend the Retail Payment System Act 2022 to ban surcharges on in-store EFTPOS, Visa and Mastercard debit and credit card payments.

Previous consultations and correspondence

2016

In February 2016, the Government asked MBIE to examine whether New Zealand’s retail payment systems — as they operate at present and as they may develop in the future — are producing good economic outcomes.

We released an Issues Paper addressing these questions in October 2016.

View the submissions on the Issues Paper

2017

In August 2017, then Minister of Commerce and Consumer Affairs Hon Jacqui Dean wrote to Payments New Zealand, the industry body for payments, expressing expectations that industry progress initiatives that support innovative payment options and improve transparency for merchants.

Hon Jacqui Dean’s update to Cabinet on retail payment systems [PDF, 146 KB]

Hon Jacqui Dean’s letter to Payments New Zealand [PDF, 61 KB]

2018

In April 2018, Payments New Zealand updated the Minister of Commerce and Consumer Affairs on the work the industry was undertaking in response to Hon Jacqui Dean’s letter of August 2017.

Letter from Payments New Zealand to Hon Kris Faafoi [PDF, 305 KB] 

Hon Kris Faafoi’s response to Payments New Zealand [PDF, 99 KB]

2020

In December 2020, MBIE released an Issues Paper exploring issues and options for regulating merchant service fees.

View the submissions on the Issues Paper(external link)