Changes are coming to New Zealand for surcharges and as a retailer we need to keep up with what is happening. Here is what you need to know to stay abreast of the changes…
What’s changing.
In September 2025, the New Zealand Parliament passed the Retail Payment System (Ban on Merchant Surcharges) Amendment Bill at first reading. Under this new law, merchants would no longer be allowed to add surcharges on to certain in-store transactions using EFTPOS, Visa, and Mastercard.
The target start date is May 2026 (or possibly earlier, depending on the final legislative timeline).
Why Is the Government Doing This?
The government has outlined several reasons for the proposed change:
- Transparency and fairness for consumers: Officials argues that hidden surcharges make it hard for customers to compare prices, and some fees go well beyond what it actually costs merchants to process the payment.
- Widespread overcharging: The Commerce Commission estimates that New Zealanders pay up to NZ$150 million a year in surcharges and a significant chunk of that (NZ$45–65 million) may be more than what merchants reasonably pay for transaction costs.
- Regulatory backing: The amendment gives the Commerce Commission the power to enforce the ban. Any surcharge applied in breach of the law would be considered unenforceable and a customer may be entitled to a refund.
- Supporting other payment reform: The ban comes as part of wider effort to improve payment systems. For example, the Commerce Commission is also lowering the interchange fees (what merchants pay to accept card payments), which should reduce costs for businesses.
What Exactly Will Be Banned — and What Won’t
As the bill currently stands:
- Banned: Surcharges on in-store payments made via EFTPOS, Visa, and Mastercard (both credit and debit).
- Not (yet) banned: Online payments, pre-paid cards, and foreign-issued cards.
- Enforcement: The Commerce Commission can issue corrective notices or seek financial penalties.
- Refunds: Any surcharge charged in breach of the ban could potentially be refunded to the customer.
What This Means for Merchants
For many businesses, particularly small businesses, surcharges have helped to offset the rising cost of accepting card payments. With this option being taken away, merchants may now need to make meaningful changes. Here’s what you need to start thinking about:
- Review your pricing strategy: Without surcharges, you may need to rethink how you recover your payment processing costs. Some businesses worry they’ll have to fold those costs into their product prices.
- Prepare for terminal updates or settings changes: If you’re currently using a surcharge solution (for example, via your EFTPOS terminal), you may need to make changes or disable those features once the ban comes into effect. You can get in touch with us if you need help.
- Communicate with your customers: Transparency, as always, remains important. Make sure your staff and signage reflect any changes in how payments are handled.
- Watch enforcement closely: Non-compliance could lead to corrective notices or penalties from the Commerce Commission, so it’s worth being proactive.
How eftpoSmart Merchant Customers Can Prepare
At eftpoSmart, we are here to help you navigate the change. Here’s what you can do now:
- Talk to us about your EFTPOS terminal: We can help you check how your EFTPOS terminal is configured and if you use surcharge prompts and what changes may be required.
- Run a cost analysis: Review your current merchant service fees (MSF) and estimate how much you recover via surcharges. Project how much of that you’ll need to absorb or re-price.
- Train your staff: Make sure your employees know how the payments work once the ban is in place and how to explain any changes to customers.
- Stay informed: The Bill is still progressing through Parliament, so it’s not yet law. But with first reading passed and a potential May 2026 effective date, now is the time to prepare.
- Plan your messaging: Think about how you’ll communicate these changes to customers. Will you highlight “no surcharge”? Will you adjust price labels? How will you signal the change in your store?
Get in touch with us if you need help: simon@eftposmart.co.nz
Final Thoughts
The proposed surcharge ban represents a significant shift in New Zealand’s payments landscape. While it promises more transparency for consumers, it creates new challenges for merchants, especially small businesses, who rely on surcharging to recover the increasing costs of card payments.
At eftpoSmart, our focus is on supporting our merchants through these changes with clarity, practical guidance and help to adapt smoothly. We’ll be following this Bill closely and helping you every step of the way to adjust when (or if) the ban becomes law.
If you have questions about how this might affect your EFTPOS setup, or want help planning ahead, feel free to reach out to us anytime.
