John Small: Commerce Commission Chair on the draft decision to reduce card payment fees for businesses

The Commerce Commission has issued a draft decision to reduce fees for businesses accepting card payments. 

It's proposing an estimated reduction of around $260 million a year where costs are handed down from banks to process payments. 

The commission revealed in July that businesses incur $1 billion in fees to provide card payments. 

Chair Dr John Small told Heather du Plessis-Allan a few will be annoyed by it, but it's important they strike a balance. 

He says they've consulted widely on it and believe they're at a point where they can simplify these rates and bring them down. 

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Episode Transcript

Speaker 1 (00:00):
Good news for you, credit card Visa coming down. The
Commas Commission has this morning finally released a plan for
how they're going to deal with these excessive fees when
you go in, you know, you tap your card to
buy your chocolate milk at the dairy. The end result
is that we should all be about two hundred and
sixteen two hundred and sixteen million dollars better off. And
joining us now is the Commas Commission's chair, doctor John small John.

Speaker 2 (00:19):
Hello, Hey, good morning, Heather.

Speaker 1 (00:22):
I love the sound of this. How do master Card
and Visa feel about it?

Speaker 2 (00:26):
Oh, look, there's a lot of people who are not
very happy about it, and yeah, they are on the
list for sure. I look at this. I described this
as a balanced decision, which means that it is going
to annoy quite a few people. But what we're doing
here is taying cost out of the system. We've consulted
pretty widely on it, and we think that we've got

(00:47):
ourselves to a point where we can simplify these rates,
bring them down, and then once that costs out of
the system there next year we're going to look at
how to deal with the surcharging on top of that
lower cost BA, how much is.

Speaker 1 (01:00):
It dropping as a proportion of what we're paying.

Speaker 2 (01:02):
At the moment, the around about a quarter of the
total cost of accepting payments is coming out, So we
think about two hundred and sixty million a year out
of the out of the cost.

Speaker 1 (01:17):
That's ending up with much framing it, aren't they.

Speaker 2 (01:22):
There's Look, there's what's important here is that there's quite
a few people. To understand, it's quite a few people
in this chain that need a little bit of money,
but they only need a little bit each. So you know,
you've got the banks of serving the merchants, You've got
the town providers, you've got the payment service providers. So
what we're having for as a system where everybody gets

(01:43):
a little bit enough to keep them going, but the
end result was not excessive.

Speaker 1 (01:48):
Now, something that you were kind of just touching on before,
how do you actually how are you going to make
sure that when I go to the dairy and I
do tap my card, that I am actually not paying
more than I'm supposed to.

Speaker 2 (02:00):
So we do have power to regulate surcharges, and that's
what that's the next step after we get through this consultation.
Remember this is a draft decision. We're going to be
flooded with stuff in the new year and feedback from
people who so much we don't understand things, and you know,
so once we get through that and we get a

(02:21):
final decision on this, then we turned to surcharging off.
Whatever the cost base happens to be, we've got we
can put in rules about it. But it's also going
to be really important to set an expectation, I think,
for the public about what they can what they can
expect to be surcharged, and what seems excessive. So we'll
be relying heavily on public understanding of what's reasonable what's not.

Speaker 1 (02:45):
Brilliant, John, thank you so much appreciated, doctor John Small,
Commerce Commission Chair. For more from the Mic Asking Breakfast,
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