Hawke’s Bay Retailers Face Challenges as Card Surcharges Banned

Changes to card payment policies in New Zealand are set to ripple through local businesses, with concerns growing over the potential impact on Hawke’s Bay retailers and service providers. The government’s recent announcement to ban most card surcharges by May 2026 has been welcomed by consumer advocates, but some business leaders are raising alarms about the unintended consequences.

The ban aims to eliminate the “hassle and an unwelcome surprise” that surcharges can create for shoppers when they reach the checkout. Consumer NZ has praised the move, saying it will make contactless payments—such as those using PayWave—more convenient for customers. However, the policy shift could place additional financial burdens on local businesses that rely on these payment methods.

Pip Thompson, general manager of Napier City Business, expressed concern that the ban could remove the flexibility and convenience that PayWave offers. “The PayWave options are a really quick and easy option for us to go and pay for something, but that might be taken away,” she said. “We are going to go backwards.”

Thompson argued that businesses will likely be forced to absorb the cost of the merchant service fee, which is currently covered by the surcharge. This could lead to increased prices for customers or even the removal of contactless payment options altogether. “They will remove the flexibility and the convenience of us just using our phones and going ‘ding’,” she said.

Some local business owners, however, have mixed views. Vincent Michaelsen, owner of Vinci’s Pizza in Napier, supports the surcharge ban. “I don’t think there is necessarily a right or wrong [on whether you do surcharges or not],” he said. “But my perspective, from a customer angle, is that I just want to make it easy.”

Others, like Glen Chan of Napier’s Cool Toys, believe that the removal of surcharges could result in higher prices. “It really mounts up,” he said of covering the merchant service fees. “Customers are used to PayWave, and if it’s taken away, it could be a problem.”

Meanwhile, Sally Holyer of Napier’s Adore Collection said the cost is worth it for the speed and efficiency that contactless payments bring, especially during busy periods like the summer cruise season.

Banks have clarified that they do not set or require surcharges, which are added by retailers at the point of sale. They also stated that the merchant service fee is essential, as it covers costs related to fraud prevention, dispute handling, and transaction authorisation. ANZ noted that the average merchant service fee is around 1% of a transaction and that banks recover their costs through these fees.

As the deadline approaches, local retailers are left to navigate the new landscape, balancing customer convenience with the financial realities of running a business. The challenge now is whether the government and financial institutions can find a way to support local businesses without compromising the benefits of contactless payments for consumers.