Commerce Commission Caps Commercial Credit Card Interchange Fees

The Commerce Commission will implement a 0.7 percent cap on interchange fees for in-person domestic commercial credit cards from Mastercard and Visa, effective April 22, 2027. The regulator estimates the measure will save businesses 40 million dollars annually. When combined with previous reductions for personal cards, the commission expects total business cost savings of approximately 290 million dollars per year.

Commissioner Bryan Chapple stated that interchange fees fund cardholder benefits like loyalty programs but ultimately increase retail prices, creating an inefficient system where the general public pays for benefits only some receive. He noted that reducing these fees would incentivize banks to support alternative payment methods and drive innovation in the market.

Retail NZ Chief Executive Carolyn Young welcomed the action but expressed disappointment that the cap was not set at 0.5 percent. Young noted that commercial credit cards account for 19 percent of all interchange fees despite representing only 8 percent of transaction value, suggesting retailers will feel let down by the decision. Meanwhile, Consumer NZ questioned whether these business savings would actually be passed on to consumers.