The New Zealand Commerce Commission has announced a decision to cap interchange fees on commercial credit cards issued by Mastercard and Visa. This move is expected to reduce costs for local businesses by around $40 million each year, contributing to a total reduction of approximately $290 million when combined with previous cuts to personal card fees.

According to Mr. Chapple, the Commission's action aims to ensure that the costs businesses incur for accepting these cards remain reasonable. It also seeks to encourage payment issuers, such as banks, to explore alternative payment methods, fostering innovation and competition in the payments sector.

Commercial credit cards, while representing a small portion of transactions, generate a significant share of interchange fees, which businesses pay through merchant service fees. These fees can lead to higher retail prices, as they are ultimately passed on to consumers.

The new interchange fee caps will take effect on April 22, 2027. Businesses are advised to review their merchant service fee arrangements and consult with their payment service providers to understand the implications of these changes.

The Commission plays a vital role in promoting an efficient and competitive payment system, focusing on innovation and competition to drive down costs for all New Zealanders.