Sam MacKinnon: Hospitality NZ Head of Advocacy on the Government banning added fees on in-store card payments

There are fears that retailers will wear the cost of scrapping payment surcharges.  

The Government will ban the added fees for most in-store card payments, including paywave.  

Hospitality NZ Head of Advocacy Sam MacKinnon says ultimately customers were always allowed to avoid the surcharges by paying in a less convenient way.  

He told Mike Hosking more work needs to be done on the issue.  

McKinnon says it's actually about the fees banks charge to accept payment.  

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Episode Transcript

Speaker 1 (00:00):
We've got to maks around the credit card fee news.
The band is coming by main next year. Banks will
still charge retailers, although the COMMAS Commission had some ideas
around that. So the concern is can a retailer soak
up the different Sam McKinnon's the head of advocacy at
the Hospitality in New Zealand, and it's whether Sam, morning.

Speaker 2 (00:14):
To you, Good morning mate.

Speaker 1 (00:16):
What's the bill for the average retailer? You got any
idea roughly run numbers?

Speaker 2 (00:21):
Well, like I think it sits between one and two percent,
so around that sort of two percent mark, So obviously
that that's a bit different depending on which business you
are and which payments you're accepting.

Speaker 1 (00:33):
What's the reaction? But I've been disappointed at the level
of banks. I mean, I would have thought this is
a good news story, isn't it.

Speaker 2 (00:40):
Look I think we're supportive of the intent behind the
proposed being, but you as a solution doesn't get to
the core of the issue, which is the fees that
banks are charging to accept payment.

Speaker 1 (00:48):
Does the COMMAS Commission though, and their ruling or their
decision make a difference on that front.

Speaker 2 (00:54):
Well, the reduction and interchange fees is helpful, but we
don't have any transparency around how those savings will be
shared or what the what the flow on will be
for businesses to be able to actually pass those costs
onto the construy.

Speaker 1 (01:06):
But once you get transparency, it might be the Commerce
Commission have done a good thing.

Speaker 3 (01:09):
Possibly, yeah, possibly, but it's part of part of the
overall system in terms of what we charge for, in
terms of what payment fees were charged as merchants, and
so it kind of deals with part of the problem,
but not the whole problem.

Speaker 1 (01:24):
What should they have done if you've got your magic
wand and you're running the place.

Speaker 2 (01:29):
Look, I mean, I think for us, it's about thinking
about what are the some substantive changes that can be
made to reduce costs for merchants and consumers. So just
just by passing the ban onto the business and the
point of sale, I think that just means that we
have to shuffle where our costs are felt across the business.
So we're currently just passing those costs on. I think,

(01:51):
you know, noting that the Minister's release talked about there
is some overcharge happening, there's still one hundred million of
genuine costs that's being passed on to the consumer, and
that business has been businesses are being left to absorb
those feats.

Speaker 1 (02:03):
How much of it sens with the consumer because you
don't have to pay this, you don't have to tap and.

Speaker 2 (02:07):
Go well exactly, and I think that that's you know,
these changes just pass on some of the penalized people
who choose to insert their card when they're paying or
pay with cash because the cost will be reflected in
the price of the goods rather than let the payment.
So yeah, I mean it's up to the up to
the customer to choose that they can still choose to

(02:27):
pay in ways that mean that they don't pay fees.

Speaker 1 (02:29):
Chicken and egg, though, isn't it. I mean the line
of profitability. I mean if you put that, if you
if you pass the charges on, you do run the
risk that people go, you know what, I'm not paying it,
therefore your business stuffers and run around with go.

Speaker 3 (02:40):
Yeah.

Speaker 2 (02:41):
Yeah, I mean there's there's always that risk. I guess
for for hospitality, we've got famously type margins and so
we've kind of got that balancing act to manage cash
flow and manage revenue in the current environment, and so
I guess from our perspective, it's a little bit ironic
and a government that calls itself pro businesses fund meal
eating costs, so it doesness without dealing with the core Recie.

Speaker 1 (03:02):
All right, Sam, I appreciate very much. Sam McKinnon, who's
the head of advocacy at Hospitality in New Zealand. For
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