There are concerns New Zealanders are paying excessive surcharges while out shopping. What are these surcharges and what should consumers know before they tap and go?
Tapping your card to make a payment might be convenient but chances are you’re almost always paying a surcharge for it.
Most businesses impose a surcharge on credit cards or contactless payments in Aotearoa now, however Consumer New Zealand is concerned some shoppers could be getting stung with higher fees.
Here’s what to look out for when making payments.
What is a surcharge anyway?
A surcharge is an additional cost that’s incurred when shoppers choose a payment method that is more expensive to provide, like credit cards or contactless payments.
These payment types cost retailers more to provide because of the technology needed to process them.
What are the rules around surcharges?
Consumer NZ says some businesses are charging more than they should when it comes to credit and debit card payments. (Source: 1News)
A new law introduced last year means businesses are paying lower fees for accepting credit card and contactless payments.
Customers should not pay more to use those payment services than what the business is charged to offer them.
Some businesses, such as big supermarkets, choose not to pass that surcharge on to customers as they benefit from the faster contactless transactions.
However, most businesses do pass on those charges.
Consumer NZ says there is no way for people to know how much it costs a business to provide a payment service and there are concerns that some may be charging more than is necessary. It says any surcharge above 2.5% is excessive.
The Commerce Commission says people must be told about any surcharge before they pay for something.
Businesses also need to make sure customers are aware of cheaper ways of paying if they are available.
The Commerce Commission said in August it is still determining whether regulation is needed over surcharges.
How can I avoid surcharges?
Sellers are expected to offer at least one way for people to make payments without incurring a surcharge.
If you’re making payment in person, inserting or swiping a debit or Eftpos card should not incur a surcharge. This is because there is no additional cost to the seller to provide those methods.
The Commerce Commission also encourages online retailers to give customers the option to make payment via internet banking where they can.
Anyone who thinks they have been misled about a surcharge can make a complaint to the Commerce Commission.
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