Thirty-five chambers of commerce have banded together — alongside industry and business associations — to urge the Government to drop the proposed ban on PayWave transaction surcharges.
In a open letter to Commerce and Consumer Affairs Minister Scott Simpson, the group said the plan was a "misguided intervention" that risked harming consumers and businesses alike.
Simpson announced the ban in July, declaring: "That pesky note or sticker on the payment machine will become a thing of the past."
"Shoppers will no longer be penalised for their choice of payment method, whether that's tapping, swiping or using their phone's digital wallet," Simpson said.
Legislation was expected in parliament by the end of the year, with the ban taking effect no later than May 2026.
Retail NZ chief executive Carolyn Young said bans in other parts of the world had encouraged greater use of the PayWave services, which had fees attached to them.
"Consumer habits will change and those that are using Eftpos will transition to contactless. A higher percentage of transactions for every business will go through with a fee attached to it, which ultimately is going to impact margins for businesses and increase prices for consumers."
'Full and proper' consultation
Young said the government needed to hit 'pause' on the proposed ban, and conduct a full consultation to ensure consumers and businesses fully understood the impact of any changes put in place.
"A simple decision made at a quick moment is not necessarily going to get the outcomes you expect," she said. "There's no free lunch.
"It's really important for a full consultation for select committee and for consideration to be given to what's actually happening as a result of the ban."
Ban will 'camouflage' transaction fees impact
Young said a blanket ban would spread the charges associated with specific cards and payment systems across all purchases, regardless of what payment method customers chose.
"There's different charges across a wide range of cards," she said. "An international card, a commercial card, Diners, Amex or Union Pay — they've got higher fees and a debit card has lower fees than a credit card.
"If a surcharge ban is put in place, it's not visible to a consumer what fees are being paid by the retailer and what increased cost might they be occurring.
"If someone's going to pay by cash or by Eftpos, they're going to pay the same price as someone that's paying by credit card, so it just continues to camouflage the outcomes for everyone."
She said surcharges allowed consumers to make informed choices about whether they were happy to pay a charge for the convenience of using PayWave.
"If somebody doesn't want to pay a surcharge, they can either use Eftpos or they can go to another business. The market decides how people will engage with you.
"It means that a fair reflection of cost allocation - which surcharging is — won't be there."
Banks will 'ultimately benefit'
Young said the ban would force businesses to absorb increasing transaction costs "with no ability to negotiate".
"The banks are the ones that are issuing the credit cards and the debit cards, and the credit card companies like Mastercard and Visa are the ones that are ultimately going to benefit, because they'll have more transactions going through.
"Ultimately, we do want to ensure that transactions are safe and that technology continues to be enhanced, but at what price? We have to find a price that is effective for everyone and that nobody is profiteering.
"Can you find that balance somewhere? That's going to be important."
Ban will have 'unintended consequences'
Hospice New Zealand said the government's plans to ban payment surcharges would have unintended consequences.
The group had joined 35 other groups in an open letter urging the government to back down on plans for the ban.
Chief executive Wayne Naylor told Morning Report the country's hospices and shops were already facing funding challenges.
"The hospice shops across the country that sell donated second hand goods are a key part of the fundraising that hospices do," he said.
"It's about half of the income that hospices generate to fund services that go directly to care and support services for people who are dying and their whānau. It's about $60 million a year.
"If the surcharges are banned, then hospices and their shops will either have to shoulder those extra costs, which will directly impact revenue, and when every dollar counts, that's really critical.
"Or increase the price of goods in our shops, and selling second hand goods is a challenge in the first place, and price increases are just difficult to do."
Naylor said there was generally not a great deal of knowledge about surcharges among the public.
"If surcharges are banned they'll become less visible and consumers will be paying for it anyway with price increases."
Further consultation with the retail sector on the proposal was also called for.
"If the Minister goes ahead with this we would like to see some opportunity for not-for-profit charities to be looked at slightly differently," he said.
Hospice New Zealand wrote to Commerce and Consumer Affairs Minister Scott Simpson last month, expressing concerns over the impact to the revenue of the country's hospices.
"I got a letter back saying he acknowledged the challenges, particularly for small businesses operating in tight margins and for charities. But he's going to do it anyway," Naylor said.
"This hasn't been thought through more broadly about what the unintended consequences are and we think that needs to be done."
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