Govt to Ban Retail Surcharges by 2026, Saving Kiwis Millions Annually

The proposed ban, set to take effect no later than May 2026, will apply to all in-store transactions—whether paid via credit card, contactless tap-and-go systems, or mobile digital wallets.

New Zealand shoppers will soon enjoy a more transparent and predictable retail experience as the Government announces a complete ban on payment surcharges for in-store purchases. Commerce and Consumer Affairs Minister Scott Simpson confirmed the move as part of a wider push to ease the financial burden on consumers and promote fairness in retail pricing.

“Surcharges are a hassle and an unwelcome surprise when shoppers get to the till,” said Simpson. “That pesky note or sticker on the payment machine will become a thing of the past.”

The proposed ban, set to take effect no later than May 2026, will apply to all in-store transactions—whether paid via credit card, contactless tap-and-go systems, or mobile digital wallets. The decision comes in response to growing concerns over hidden or excessive surcharges, which have cost New Zealanders an estimated $150 million annually.

Why the Ban Matters: Restoring Transparency and Trust

For years, New Zealand consumers have faced inconsistent and sometimes opaque payment surcharges when using certain payment methods, particularly credit cards or contactless options like Apple Pay or Google Wallet. These fees, typically added at the point of sale, are meant to offset transaction costs borne by businesses—but they have often been applied in an unpredictable and excessive manner.

In some cases, the surcharges were not clearly disclosed in advance, leading to frustration at the checkout. In others, businesses charged well above the actual costs they incurred, contributing to what the Government estimates is $65 million annually in excessive fees.

Simpson emphasized that the move is about protecting consumers and restoring confidence in everyday transactions. “A ban on surcharges means no more surprises for people who currently feel like they’re being charged to use their own hard-earned money,” he said. “It means they can make a purchase knowing exactly what they’ll pay, and how they’ll pay it.”

Business Support Measures Already in Place

To address concerns from retailers about absorbing transaction fees, the Government and the Commerce Commission have already taken steps to reduce the financial burden on merchants. Most notably, a decision to cap interchange fees—the fees banks charge businesses to process Visa and Mastercard payments—is expected to save retailers around $90 million per year.

These lower transaction costs should help offset the impact of removing surcharges entirely. By reducing these backend costs, the Government aims to ensure that businesses remain competitive while consumers enjoy more equitable and straightforward pricing.

Scope and Implementation Timeline

The surcharge ban will apply across the board to all in-store transactions, regardless of industry or business size. It will not extend, at least initially, to online purchases, where additional payment processing costs and variable international fees still pose a more complex regulatory challenge.

Officials have set a firm implementation deadline of May 2026, giving businesses ample time to adapt their pricing structures, upgrade point-of-sale systems, and adjust their signage. The Ministry of Business, Innovation and Employment (MBIE) will also issue updated guidance and compliance support to ensure a smooth transition for retailers.

Reactions from Consumers and Industry

Consumer advocacy groups have welcomed the announcement, saying it aligns with longstanding calls to simplify payment practices and eliminate what they see as "junk fees." Many point to cases where shoppers unknowingly paid 2% to 3% more for everyday items simply because of the card they used.

Retailers, meanwhile, have expressed mixed views. While some smaller businesses are concerned about absorbing additional costs, others recognize that transparent, surcharge-free pricing may boost customer trust and ultimately increase foot traffic and sales.

Payment processors and merchant services providers are also expected to play a role in adjusting systems and communications to support the new requirements.

A Broader Push to Lower Consumer Costs

The surcharge ban is part of the Government’s broader economic strategy to put more money back in Kiwis’ pockets, especially amid inflationary pressures and cost-of-living challenges. Other initiatives include actions to improve competition in the grocery sector, regulate merchant fees, and enhance consumer protections in digital marketplaces.

“We’re committed to making it easier and fairer for New Zealanders to shop and do business,” Simpson said. “Whether it’s groceries, clothing, or home essentials, you should know the full price before you reach the checkout—and not be penalised for how you choose to pay.”

Once in force, the surcharge ban will bring New Zealand in line with other jurisdictions that have taken similar steps to regulate or eliminate hidden payment fees, including Australia and parts of the European Union.

As May 2026 approaches, consumers can look forward to a retail environment with fewer surprises and more financial clarity—one where every dollar spent goes toward goods and services, not hidden costs.