New Zealand was supposed to be first. A year ago the Government promised to scrap the annoying card surcharges that greet shoppers at the checkout, and set itself a deadline of May 2026 at the latest. That deadline has been and gone, the surcharges are still there, and the bill that was meant to kill them is parked in Parliament with little sign of life. Across the Tasman, meanwhile, Australia has done the thing New Zealand talked about. From 1 October 2026 surcharges on everyday card payments will simply be switched off. The country that moved first has stalled, and the country that followed is about to finish the job.
How New Zealand got ahead and then stalled
The momentum was real to begin with. In July 2025 the then Commerce and Consumer Affairs Minister Scott Simpson announced a ban on in-store surcharges, promising that “that pesky note or sticker on the payment machine will become a thing of the past”. A bill followed in September, passed its first reading, and went through the Finance and Expenditure Committee, which recommended by majority that it proceed. New Zealanders pay up to 150 million dollars a year in surcharges, and the Commerce Commission has estimated that somewhere between 45 and 65 million dollars of that is more than businesses actually pay to accept the cards. Roughly one in five businesses surcharges at all, so for most shoppers the fee is an irritation rather than a daily cost, but it is a visible one.
Then the politics caught up with it. ACT withdrew its support, arguing that a business should be allowed to surcharge as long as it offers a fee free alternative such as cash or eftpos. New Zealand First leader Winston Peters told reporters in February that the bill was “going nowhere”. The Prime Minister, Christopher Luxon, said the Government wanted to slow down, telling media, “We just want to make sure we understand all of the implications before we push the final button on it.” By late March the ACT leader David Seymour was blunter still, declaring, “It’s dead. It was always bad economics.” Scott Simpson, still the minister at that point, would say only that “no further decisions have been made on the ban on surcharges”.
The promised May deadline then slipped past without a word, as Newswire reported at the time. A Cabinet reshuffle in April handed the portfolio from Simpson to Cameron Brewer, who insisted the policy was still alive, saying his caucus continued to support a ban and would “have something to say shortly”. In June the Finance Minister, Nicola Willis, offered another holding line, saying it “still remains the Government’s intention to get rid of those Paywave fees” while acknowledging the concerns raised at select committee. For now the bill sits on the order paper, neither passed nor formally abandoned, and short of opposition votes it is hard to see how it moves this term.
What did change, the interchange caps
It is worth being clear about what is and is not happening, because it is easy to assume the surcharge fight has already been won. It has not. Surcharging remains perfectly legal in New Zealand, subject only to the long standing rule that the fee cannot be more than it actually costs the business to accept that payment. The part of the system that did change is quieter and sits underneath the surcharge, in the wholesale fees that make surcharging worthwhile in the first place.
Most of what a merchant pays to accept a Visa or Mastercard payment is the interchange fee, the slice that goes from the merchant’s bank to the cardholder’s bank, and it makes up around 60 percent of the total. Accepting those cards costs New Zealand businesses about a billion dollars a year. From December 2025 the Commerce Commission cut the cap on in-person personal credit card interchange from about 0.8 percent to 0.3 percent, and from May 2026 it capped the fees on foreign issued cards for the first time. Together those changes are expected to save businesses around 90 million dollars a year, on top of about 140 million from an earlier round of caps in 2022, and in early June the Commission proposed going further by capping commercial credit cards as well. The law firm MinterEllison noted in mid 2025 that Australia was heading toward “a more expansive and prescriptive approach to regulation of card scheme fees”, a direction New Zealand may yet follow.
None of that, though, stops a shop adding a surcharge at the till. That is the gap the stalled bill was meant to close.
What Australia is doing
Australia has gone the whole way. After a long review of card payment costs, the Reserve Bank of Australia confirmed in its final report at the end of March 2026 that it will ban surcharges on eftpos, Mastercard and Visa from 1 October 2026, covering debit, prepaid and credit cards alike. The Reserve Bank found that Australians were charged about 1.8 billion dollars in surcharges in a single year, roughly 1.6 billion of it paid by consumers, and decided the simplest fix was to stop the practice rather than police it. Alongside the ban it is cutting interchange fees, dropping domestic consumer credit from 0.8 percent to 0.3 percent on the same date, with caps on foreign card fees and new transparency rules to follow in April 2027.
The Australian ban is not total. American Express, Diners Club and buy now pay later services sit outside it for now, with a separate review to come, and the competition regulator has already warned merchants that they cannot dodge the ban by quietly renaming a card surcharge as an admin or handling fee. There has been business pushback there too, so the picture is not frictionless. It is worth correcting one local misunderstanding as well. In February the Auckland Business Chamber’s Simon Bridges suggested that Australia had walked away from a similar policy. In fact Australia did the opposite and pressed ahead, which is precisely what makes the contrast so sharp.
The case for a ban and the case against
Consumers are firmly on one side of this. Consumer NZ’s sentiment tracker, a nationally representative survey of around a thousand people, has found close to three in five New Zealanders support a ban and only about 15 percent oppose it, with most thinking businesses should simply absorb the cost of accepting payments. The group’s campaign manager, Jessica Walker, has argued that because interchange caps have already trimmed what merchants pay, any price rise from a ban would be minimal, on the order of one percent, and that a clean ban is far easier to enforce than chasing down surcharges that are too high.
The business case against a blanket ban is not just self interest, and it deserves to be heard at full strength. A surcharge lets a merchant pass the cost of an expensive payment method on to the person who chooses it. Take that away, and a small operator who pays the highest card fees has to either swallow the cost or lift shelf prices for everyone, including the customers who pay by cash or by traditional eftpos and currently avoid the fee altogether. Large chains negotiate their card costs down to almost nothing, so the burden of a ban falls hardest on the small end of town. Seymour’s argument is that a policy should be judged by where the cost actually lands rather than by good intentions. Retailers and business chambers have suggested capping surcharges instead of banning them, or letting a business keep surcharging as long as it offers a free way to pay. Supporters counter that the interchange cuts have already done the heavy lifting on cost, so the practical difference to small business would be slight.
A live experiment across the Tasman
The upside of moving second is that you get to watch. From October, New Zealand will be able to see what actually happens when a country switches surcharges off, whether prices creep up to compensate, whether small businesses are squeezed, and whether shoppers notice any difference at all. That is real evidence, and it lands right as the Government keeps insisting the policy is only paused rather than dead. For a measure that most voters back, in an election year, the surcharge ban has become an unusually clear test of how the Government weighs the interests of consumers against those of small business. Australia is about to give New Zealand the data to decide.
Do you think shops should be allowed to surcharge, or should the fee be scrapped for good? Tell us in the comments below.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job π
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