New Zealanders are still paying card surcharges as the government’s promised May 2026 ban deadline slips quietly past
When the previous commerce minister Scott Simpson stood up in July last year and promised to ban card surcharges in New Zealand by May 2026 at the very latest, the announcement was framed as a clean win for shoppers tired of being charged 2 percent or more on top of their bill simply for tapping a card. Ten months on, the deadline has arrived and gone, the ban is nowhere in sight, and the new commerce minister, Cameron Brewer, has told reporters only that he will “have something to say shortly”.
The Retail Payment System (Ban on Merchant Surcharges) Amendment Bill remains stalled in Parliament without enough coalition support to pass. According to interest.co.nz, Brewer told reporters there was “no update to give” but that National’s caucus position still backs a ban. He said the government was “working through that” and would speak to it shortly. The minister has repeated that line several times since taking on the portfolio, with no firm timetable attached.
The story of how a popular policy stalled is unusually instructive. The bill had its first reading last winter and looked on track to clear Parliament by this month. Then ACT pulled its support, proposing that surcharges should still be permitted whenever a merchant offers a free alternative such as cash or eftpos. New Zealand First told reporters the bill was “going nowhere”. The Greens, who back the principle, have suggested capping merchant service fees at 1 percent and giving the Commerce Commission oversight, with party spokespeople saying the bill “doesn’t need to die”. Labour’s commerce spokesperson Arena Williams told interest.co.nz that the party will reserve its position until the second reading and is uneasy about pushing all system costs onto small businesses. “Banks and others like Visa and Mastercard have a role in this. They make money from the retail payment systems we use in New Zealand and so it seems right that they would share some of the burden here,” she said.
The political backdrop has shifted since last winter. In late 2025 the Commerce Commission ordered cuts to interchange fees, the wholesale charges that card networks levy on banks for processing transactions. Those cuts were estimated to save New Zealand businesses around $90 million a year. Retailers welcomed the savings but Consumer NZ has warned that, without a surcharge ban, the cost reductions are likely to stay on retailers’ bottom lines rather than flow through to shoppers. Consumer NZ’s Jessica Walker told RNZ that “our research has found support for a ban is getting stronger” and that her organisation remained worried savings “will not be passed on to consumers”. A Consumer NZ survey in January put public support for a ban at 58 percent, with just 15 percent opposed.
Business lobbies see it differently. The Auckland Business Chamber’s chief executive Simon Bridges told RNZ in February that “29 chambers all over the country reacted viscerally to this” and that he viewed the ban as “a slogan in a sense more than it is a policy”. Retail NZ has warned that payment costs sit at between 1 and 2.5 percent of every transaction, a meaningful margin in industries already operating on thin returns. Bridges has also pointed to a steady migration in how Kiwis pay, with the share of debit transactions falling from around 60 percent of card spend to about 30 percent over the past decade, and credit’s share climbing from 40 to 70 percent. That shift makes the merchant fee question larger every year. Prime Minister Christopher Luxon has said the government was taking “a breather” on the policy to understand “all of the implications”.
In practical terms, every Kiwi who has tapped a card at a café, taxi, dairy or hospitality venue in the past month has paid for the political stalemate. Surcharges of 2 to 3 percent on contactless payments are now routine across hospitality and small retail, particularly in Auckland and Queenstown, and there is no statutory ceiling on what a merchant can add. With the deadline gone, payment terminals will keep doing what they have been doing.
The bigger commercial question is whether the next move comes from Wellington or from the market. Banks and the major card schemes have been quietly trialling lower-fee tap-to-pay options aimed at small merchants, and some hospitality groups are pushing for tiered pricing that exposes the fee to the customer line by line rather than as a flat surcharge. If the bill remains paralysed for another quarter, expect retailers, payment providers and consumer groups to start writing the rules between themselves.
For now, what was sold last winter as a clean fix has become an awkward example of how coalition arithmetic can outlast even a popular policy. Brewer’s “shortly” is doing a great deal of work, and shoppers should not budget on the surcharge line disappearing from their receipts any time this winter.
What’s your view on card surcharges — are they a fair user-pays charge for those who choose convenience, or a hidden tax on cashless shoppers? Have you noticed venues hiking surcharges since the ban was first promised? Tell us in the comments below.