The Commerce Commission is looking into regulating fees for PayWave and online card payments.
The market watchdog says adding regulation could save Kiwis $250 million dollars, from the $1 billion a year they spend on fees in-store and online.
Chair John Small says they're exploring changes that could reduce surcharges to 0.7 percent.
"Part of what we're doing here is trying to simplify these rates so that the merchants know much more clearly what's costing them - and then that allows buyers to know that."
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Speaker 1 (00:00):
Afternoon. The Commerce Commission has taken the first step towards
putting a cap on what you pay to use your
credit card as a pay wave card. They reckon, we
are paying too much for the privilege, about a billion
dollars a year, and the ComCom has started consultation about
regulating that amount. John Small is the chairman of the
Commos Commission with us now, Hey.
Speaker 2 (00:15):
John, hey, hell, how are you doing very well?
Speaker 1 (00:18):
Thank you?
Speaker 2 (00:18):
Now?
Speaker 1 (00:18):
Am I right in thinking you want to take the
surcharge down from about an average of two point five
percent to zero point seven percent?
Speaker 2 (00:26):
Yeah, that's pretty much the strength of it, that's right. Yes,
we think that that's doable, and we think it'll be
pretty beneficial in lots of ways.
Speaker 1 (00:35):
If you are successful in being able to regulate this.
Does this mean, for example, that if you go to
pay your parking and it's three dollars and you're going
to tap your card, you no longer pay a fifty
cents charge for tapping your card. You only pay zero
point seven percent.
Speaker 2 (00:49):
That's what it should be. It's that, you know, a
zero point seven percent. Some merchants will say why bother?
And that would be a good outcome. The reason we're
saying zero point seven percent is a part of what
we're doing here, Heather as trying to simplify these rates
so the merchants know much more clearly what they're what
(01:09):
it's costing them, and then that allows us as buyers
to also know that. So if you see, under this
new new world, if consultation goes the way that we
kind of hope it will, then people will be able
to expect to not ever pay more than.
Speaker 1 (01:26):
Point seven If they are charged zero point seven percent
of paying three dollars for your parking is not even
one cent. So if they're charging us fifty cent, are
they ripping us off?
Speaker 2 (01:37):
Well, these are charges that we're seeing at the moment.
A lot of them are well above cost. But part
of the problem is that is that you and I
don't actually know what their cost is, and sometimes they
don't neither.
Speaker 1 (01:51):
How much more are they charging us in New Zealand
than they're charging overseas? This is Visa and master.
Speaker 2 (01:55):
Cand well, you know, in New Zealand's interchange this is
an change fee that we're talking about pushing down. You know,
ours are sort of higher than some and lower than others.
Basically around the world. But we're looking at the UK
in Europe where and benchmarking fees against them. They seem
(02:15):
to be able to maintain perfectly viable payment networks, and
so that's the kind of benchmark that we're looking at.
But you know, as you know, there's been much higher
rates than that in New Zealand and elsewhere.
Speaker 1 (02:28):
Yeah, and if you are able to introduce this cap,
would this include tapping online fees that you pay for
your credit card, like, for example, when you pay for
the New Zealand.
Speaker 2 (02:37):
We yes, it will be. It's designed to be very universal.
So as I say, we're in consultation at the moment.
We'll see what people have got to say. Some people
might tell it's a terrible idea because of this or
that unexpected unintended consequence. We'll have a look at all that.
(02:57):
But that's definitely where we're hitting, right.
Speaker 1 (03:00):
You know, you want the retailers to absorb this stuff.
If it gets low enough, do you think they will learn?
Speaker 2 (03:05):
Hard to know? But I mean I think either way
it's not going to matter too much. If there's a
clear expectation and it's such a low number as zero
point seven, then you know it's not as you say
it's only going to be a few cents on a
small purchase, so for them it might be a wide
bother and for us it's you know, just not much. Hopefully, John.
Speaker 1 (03:25):
I'm into this. I want to see you do this.
So how long do I have to wait?
Speaker 2 (03:29):
Good question. We've got the consultation open for I think
a couple of weeks or maybe a bit longer. The
good news is that the Commission has the power to
do this, so we don't have to go to a
court or persuade a minister or anything like that. So
we'll see, We'll see what comes back in the replies
(03:49):
and then have a good hard plink about it internally
and make our call good stuff.
Speaker 1 (03:53):
Really appreciate your time, John, that's John Small, Commerce Commission Chairman.
Speaker 2 (03:57):
For more from Hither duplessy Ellen, drive Live to News
Talks it be from four pm weekdays, or follow the
podcast on iHeartRadio.
Afternoon. The Commerce Commission has taken the first step towards
putting a cap on what you pay to use your
credit card as a pay wave card. They reckon, we
are paying too much for the privilege, about a billion
dollars a year, and the ComCom has started consultation about
regulating that amount. John Small is the chairman of the
Commos Commission with us now, Hey.
Speaker 2 (00:15):
John, hey, hell, how are you doing very well?
Speaker 1 (00:18):
Thank you?
Speaker 2 (00:18):
Now?
Speaker 1 (00:18):
Am I right in thinking you want to take the
surcharge down from about an average of two point five
percent to zero point seven percent?
Speaker 2 (00:26):
Yeah, that's pretty much the strength of it, that's right. Yes,
we think that that's doable, and we think it'll be
pretty beneficial in lots of ways.
Speaker 1 (00:35):
If you are successful in being able to regulate this.
Does this mean, for example, that if you go to
pay your parking and it's three dollars and you're going
to tap your card, you no longer pay a fifty
cents charge for tapping your card. You only pay zero
point seven percent.
Speaker 2 (00:49):
That's what it should be. It's that, you know, a
zero point seven percent. Some merchants will say why bother?
And that would be a good outcome. The reason we're
saying zero point seven percent is a part of what
we're doing here, Heather as trying to simplify these rates
so the merchants know much more clearly what they're what
(01:09):
it's costing them, and then that allows us as buyers
to also know that. So if you see, under this
new new world, if consultation goes the way that we
kind of hope it will, then people will be able
to expect to not ever pay more than.
Speaker 1 (01:26):
Point seven If they are charged zero point seven percent
of paying three dollars for your parking is not even
one cent. So if they're charging us fifty cent, are
they ripping us off?
Speaker 2 (01:37):
Well, these are charges that we're seeing at the moment.
A lot of them are well above cost. But part
of the problem is that is that you and I
don't actually know what their cost is, and sometimes they
don't neither.
Speaker 1 (01:51):
How much more are they charging us in New Zealand
than they're charging overseas? This is Visa and master.
Speaker 2 (01:55):
Cand well, you know, in New Zealand's interchange this is
an change fee that we're talking about pushing down. You know,
ours are sort of higher than some and lower than others.
Basically around the world. But we're looking at the UK
in Europe where and benchmarking fees against them. They seem
(02:15):
to be able to maintain perfectly viable payment networks, and
so that's the kind of benchmark that we're looking at.
But you know, as you know, there's been much higher
rates than that in New Zealand and elsewhere.
Speaker 1 (02:28):
Yeah, and if you are able to introduce this cap,
would this include tapping online fees that you pay for
your credit card, like, for example, when you pay for
the New Zealand.
Speaker 2 (02:37):
We yes, it will be. It's designed to be very universal.
So as I say, we're in consultation at the moment.
We'll see what people have got to say. Some people
might tell it's a terrible idea because of this or
that unexpected unintended consequence. We'll have a look at all that.
(02:57):
But that's definitely where we're hitting, right.
Speaker 1 (03:00):
You know, you want the retailers to absorb this stuff.
If it gets low enough, do you think they will learn?
Speaker 2 (03:05):
Hard to know? But I mean I think either way
it's not going to matter too much. If there's a
clear expectation and it's such a low number as zero
point seven, then you know it's not as you say
it's only going to be a few cents on a
small purchase, so for them it might be a wide
bother and for us it's you know, just not much. Hopefully, John.
Speaker 1 (03:25):
I'm into this. I want to see you do this.
So how long do I have to wait?
Speaker 2 (03:29):
Good question. We've got the consultation open for I think
a couple of weeks or maybe a bit longer. The
good news is that the Commission has the power to
do this, so we don't have to go to a
court or persuade a minister or anything like that. So
we'll see, We'll see what comes back in the replies
(03:49):
and then have a good hard plink about it internally
and make our call good stuff.
Speaker 1 (03:53):
Really appreciate your time, John, that's John Small, Commerce Commission Chairman.
Speaker 2 (03:57):
For more from Hither duplessy Ellen, drive Live to News
Talks it be from four pm weekdays, or follow the
podcast on iHeartRadio.
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