What’s going on with the surcharge ban?

Introduced in September 2025 to prohibit surcharging on contactless payments, the Retail Payment System (Ban on Merchant Surcharges) Amendment Bill has been stuck on its first reading ever since. With all legislation requiring three readings before coming into force, it appears that the ban won't be introduced anytime soon.

When asked about it last week, the leaders of the three governing parties did little to indicate it was a pressing priority. Prime Minister Chris Luxon said they were “taking a breather” on the policy, while his Deputy David Seymour told reporters the government had listened to feedback from the business community. However, perhaps the most succinct summary of the bill’s status was provided by NZ First’s Winston Peters, who flatly stated it was “going nowhere”.

This lack of urgency has not been well-received by advocacy group Consumer NZ, who point to research estimating kiwis are forking out up to $65 million every year in excessive surcharge payments, with the highest reported fee coming in at a whopping 25%. Chief Executive Jon Duffy believes it’s a significant issue. 

“It’s quite widespread, and the Commerce Commission has quantified that this excessive surcharging is costing consumers between $45 and $65 million every year.”

However, the apparent halt in progress is being welcomed by representatives of the business community, who had argued from the start that the ban would force them to raise prices for everyone, including those who still swipe their cards the old-fashioned way. 

Carolyn Young of Retail NZ said their membership is strongly against it.

“What they’re wanting to see is a pause in the current strategy, go back to the old space, have the Commerce Commission do a consultation, fully understand the implications and from there be able to understand what is a balanced outcome that we could get that’s going to work for everyone.” 

So, is the surcharge ban dead in the water? Despite the government’s reluctance to press ahead with it, the fact that it introduced the bill in the first place indicates there is some level of public support for the move. Along with its work documenting excessive surcharges, Consumer has also recently conducted a survey which found that public sentiment hasn’t turned against a ban. In fact, Duffy claims it's increasing.

“Support for a ban is growing. Close to 60% of New Zealanders support a ban, and only 15% oppose. The majority of people are in favour of this.”

Although Duffy maintains the simplest solution is an outright ban, Retail NZ has proposed a compromise, which would see surcharges regulated through measures such as a cap on the fees. As we head towards an election, with the public still seemingly in support of some form of action, such an option could prove increasingly attractive to the government.