New Zealand retailers criticize weak commercial card fee cap

New Zealand’s Commerce Commission will cap interchange fees on Mastercard and Visa commercial credit cards at 0.7% for in-person domestic transactions. The country’s retail sector says the move does not go far enough, arguing that additional measures are required to ease the financial pressure on merchants.

The final decision follows a proposal that ranged from 0.5% to 1.5%, depending on transaction type and card origin. The regulator estimates the cap will reduce merchant service fees by $40 million annually, adding to earlier cuts on personal card fees that already save businesses $290 million per year. Retail NZ, which backed the cap in its submission, argues commercial cards generate disproportionate costs: they account for 19% of interchange fees despite handling only 8% of transaction value.

Retail NZ chief executive Carolyn Young noted that retailers cannot distinguish between personal and commercial cards at checkout, making fee reductions harder to target. Young added that retailers cannot tell at the point of sale whether a customer is using a personal, international or work card, though she welcomed the commission’s recognition that action was needed. “We will have to wait and see just how much of a difference the new interchange fee cap will make to retailers, and we encourage the commission to continue to work to reduce other card fees faced by the retail sector,” she said.

Currently, businesses pay $170 million yearly in merchant service fees for commercial cards, with $125 million of that tied to interchange fees. The commission acknowledges these fees fund cardholder benefits such as loyalty programmes and expense-reporting tools, but argues they create an inefficient system by shifting costs to all consumers—even those who do not use commercial cards.

The new rules take effect on April 22, 2027, and the commission expects lower fees to push banks toward supporting alternative payment methods. This shift could increase competition in how transactions are processed and encourage the adoption of newer, digital payment solutions.