Jessica Walker: Consumer NZ Acting Head of Research and Advocacy on the growing calls to ban credit card surcharges

Mastercard has recently released a survey showing a significant amount of Kiwis want credit card surcharges banned.

The data shows 61 percent of respondents would support a ban and 75 percent don't believe surcharges are fair - and 44 percent feel retailers should absorb the costs.

Consumer NZ's Acting Head of Research and Advocacy, Jessica Walker, says the surcharge debate is a complicated topic.

"Businesses are charged a fee for using these payment networks - and of course, Visa and Mastercard are going to benefit from surcharges being banned, because it means more people will use Visa and Mastercard."

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Episode Transcript

Speaker 1 (00:09):
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Speaker 2 (00:16):
MasterCard has released a survey that it says shows kiwis
want surcharges band. Apparently sixty one percent of US would
support a ban, Seventy five percent of US do not
believe that surcharging is fair. Forty four percent of US
think that retailers should absorb into change fees without surcharging
or without increasing the price. And Jessica Walker is Consumers
Acting Head of Research and Advocacy. Hey Jessica, Hi, Hada,

(00:39):
how are you doing. I'm very well. I need you
to I need you to explain something to me, Jessica.
I look at this coming from MasterCard, who I believe
are ultimately responsible for the fact that we get surcharged,
and I think they have got a bloody brass neck
putting something like this out. Am I wrong?

Speaker 3 (00:55):
Well, it's really complicated, and I feel like I'm always
staying complicating. It sounds like a cop up. But payment
systems are really complicated, and businesses are charged a fee
for using these these payment networks, and so of course
Visa and MasterCard are going to benefit from surcharges being
banned because it means that more people will use Visa

(01:15):
and MasterCards because it will be free for them to
do so. But we think we've gone on the record
and said that surcharges are a national embarrassment, and we
stand by that. There is a huge problem.

Speaker 2 (01:26):
You blame for them? Who do you blame for them?
Do you blame Do you blame MasterCard and Visa who
have who introduced the fees? Do you blame the retail
banks who also have fees? Or do you blame the
little retailer who I bought my coffee from today, who
is going to have to absorb what is in some
cases like thousands of dollars? It's a lot. Who do

(01:48):
you blame?

Speaker 3 (01:50):
And we don't blame one person, and again it sounds
like a cup out or one organization, But we are
saying that there needs to be regulations, so right now
is guidelines, and so we think that's what's contributing to
the mess there was the consumer is the horrible experience,
But also I get your point that for small businesses
it's also a mess because they're they're incurring fees that
they shouldn't be and they've got no choice but to

(02:10):
pass them on, or if they're not passing them on,
then it means it's costing them more. So what we
think is a band should absolutely be on the table.
But in the meantime, we really support this further interchange regulation,
which is what the Commerce Commission has just been consulting on.
And what that should mean is that costs for businesses
come down, so which should cost them much less to

(02:31):
expect bad payments, and that's what we an interim measure.

Speaker 2 (02:34):
Am I wrong to blame Visa and master Card for this?
Am I wrong to actually see them as the lead
culprits because when I read about what happened last year
around about this time in the US, they reached a
thirty billion dollar settlement over these credit card fees, which
was basically accepting that they were too high. So am
I wrong blaming them for us?

Speaker 3 (02:56):
I think blame needs to be a portioned across lots
of different players because right now, tell me who they are,
so who What we don't understand is where the extra
money is going. So we think that's one question that
needs to be asked. And the credit card companies, Yeah, yeah,
well yeah, and then are there some retailers that are

(03:18):
taking some cream off the top as well? Is it
payment service providers? So there's so many questions, but at
the end of the day, is that it's the consumer
that's paying the cost for this. It does need to
be addressed.

Speaker 2 (03:29):
But okay, to get back to my point, though, master
card does have a bloody brass neck, don't they.

Speaker 3 (03:35):
We'll taking a benefit.

Speaker 1 (03:37):
It's secon.

Speaker 2 (03:39):
They're charging them. I mean, how can they think about this, Jessica,
How can they actually say that these charges, these surcharges
need to be banned, Like the little retailer who's selling
you the tiny little pot part you're buying has to
stop the surcharge because they want to fill their pockets
the old cretit card companies. Anyway, never mind, I'm not
going to force you to take my side on this. However,

(03:59):
it seems to me that what the Commerce Commission is
proposing is actually a solution to this, right because not
only are they going to regulate what these fat cats
can charge, but they then do actually regulate also what
the retailers can charge you.

Speaker 3 (04:10):
And I yeah, that's right. So at the moment, the
section that's that's regulated is what the business is paying,
but what you, as the contumer pay is what's it's
There are only guidelines, and we think that they're being
ignored because surcharges are supposed to be not excessive. They're
supposed to be visible, and you're supposed to know in
advance what you're going to pay, and a lot of

(04:31):
the time what consumers are telling us, and we know
we're all consumers ourselves that that's not the case. So
we absolutely support the Commerce Commission bringing those charges down,
which should mean that if there is an all outbound
which we think should be on the table, then businesses
fees are going to be lower. So if those costs
are passed on in higher costs of service and goods,

(04:52):
it should be less than one percent overall, and we
think that's a much better position than what we're in now.
You know, for example, the most egregious surcharges we've heard
about in the last few months was twenty five percent. Who
behavior's just gone to stop it with a nail still
on somewhere twenty five percent. It's just absolutely shocking to.

Speaker 2 (05:12):
Right, Hey, thank you very much, Jessica. Always appreciate it.
Jessica Walker, Consumers Acting Head of Research and Advocacy.

Speaker 1 (05:18):
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