Simon Bridges: Auckland Business Chamber CEO voices concerns surcharge ban will harm small businesses

The New Zealand Chambers of Commerce have warned that the Government’s proposed ban on retail payment surcharges risks hitting small businesses with higher costs.

Simon Bridges, CEO of the Auckland Business Chamber, acknowledged that the Government was trying to protect consumers from additional fees - but voiced concerns about what this ban could do for smaller operators.

He says the ban isn't a cost-free exercise - and someone will have to pay the merchant fees. 

"It's either going to be through price hikes that consumers may not appreciate or understand - or it's going to be the poor old SME in areas like retail, hospo, tourism that are going to be having to find a way to pay for it."

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Episode Transcript

Speaker 1 (00:00):
Now the New Zealand Chambers of Commerce have banded together
and spoken out against the government's surcharge band they're worried
it's going to harm small businesses. Simon Bridges is the
CEO of the Auckland Business Chamber and speaking on behalf
of all of them, and of course a former National
Party leader and with us. Now, Hey, Simon, hey, evening, Heather.
Any idea how big the impact is going to be
on small and medium sized retailers.

Speaker 2 (00:20):
I think really significant. I mean the first point I'd
make is you mentioned the New Zealand Chambers twenty nine
chambers from Northland to Southland. Yesterday my email was going hot.
I mean, they are really concerned about this all over
the country and that's because I think, to answer your question,
we're talking about ninety seven percent of businesses which are
small and medium businesses. And the reality is the banning

(00:42):
of a surcharge isn't a cost free exercise, despite what
the government may think. Consumers may like it, but someone
has to pay merchant fees and I think the news
on that is Look, it's either going to be through
price hikes that consumers may not appreciate or understand, or
it's going to be the poor old sme in areas

(01:02):
like retail, hospo, tourism that are going to be having
to find a way to pay for it. And I
hate to tell again the government the bad news, but
those SMEs aren't exactly in clover at the moment.

Speaker 1 (01:13):
No, are you surprised by the strength of feeling out there?

Speaker 2 (01:17):
I am. Look, you know, at first blush, I think
you know, you see the announcement, you think, oh, well,
that all sounds very nice. That's well intentioned. There's a
lot of people will like that. But I think you know,
when you really think about it, there is a merchant
fee from banks or from other payment providers. It does
have to be paid. And so look, actually, one way

(01:38):
to think about this is all the government's doing by
banning the surchargers is they're making the whole thing less transparent.
The fee, the cost, the price in the end to
someone that someone's got to pay, whether it's consumers or SMEs,
it doesn't go away. It's just being hidden.

Speaker 1 (01:54):
Now what do you think is going on here? So
I'm gonna put your political hat on and explain this
to me, because this is a government that's supposed to
be pro business, pro smaller medium enterprise, and yet they've
done something that they know full well is going to
hurt these guys. Why they do it?

Speaker 2 (02:08):
What I suppose this is in there and there, you know,
there was so many you know, unintended consequences come from that.
They've got good intentions. They're sitting there thinking, well, this
is going to be good for consumers. We've heard a
lot of gripes about this out on the stumps, but they,
you know, I think in the Chamber of commerce movement
thinks haven't really thought it through. I think the other

(02:29):
surprising thing about this is when you think about someone
has to pay it may well be in many cases
that the retailers that the SME is paying it. But
I still, for the life and we can't see why,
you know, you wouldn't have gone to source of the fees, which,
as I says, banks fundamentally and other payment providers, why

(02:49):
they haven't gone there? And instead they're probably getting you know,
ninety seven percent of businesses the SMEs. That's a bit
beyond me.

Speaker 1 (02:57):
Listen, have you got a grip yet on just how
this actually works? How much the banks are responsible, how
much for how much the Visit Master card guides are
responsible for. Because it's so complex. It's really hardening wine,
isn't it.

Speaker 2 (03:11):
No, Look we haven't. I mean, what's happened yesterday. The
announcement was on Monday yesterday. As I say, my emails
were hot, literally from the morins of all the Cambridge
through the Southland and Queenstown Chambers of Commerce. They were
all on. They were getting a lot of feedback, so
I couldn't tell you a percentage. I think what's true is,
you know, if we're being objective about this, there will
be cases where the bank put on you know, X,

(03:34):
and there'll be retailers who put on a bit more
than that they sweetened the deal. But I'll give you
an example I just saw in from the Queenstown Chamber.
You know, travel agents they can no longer charge any
commission on you know, the likes of Air New Zealand fees.
You know, so if the punter comes in and wants
to pay for that on credit card, you know, by

(03:55):
tapping their card. Look, actually, one way to think about
it is a travel agent is helping pay for that
person's holiday, right They are paying real cost with that.
So that's the sort of thing we're talking about.

Speaker 1 (04:08):
Yeah, all right, do you reckon you can get them
to back down.

Speaker 2 (04:12):
I think we'll try. I mean, I think what we
need to do is talk to ministers. Look, there's definitely
an issue here, but the way through isn't I don't
think unnecessarily this. They're talking about a bill before the
end of the year, and you can beat your bottom
dollar that the Chambers of Commerce will be submitted on
it go you.

Speaker 1 (04:30):
That's the spirit, Simon Bridges, CEO of the Auckland Business Chamber.

Speaker 2 (04:34):
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