Co-owner of xtravel Tori Keating says the ban on credit card surcharges coming in next year will hurt the industry in ways the government has not considered.
Queenstown-based Keating (pcitured) says some businesses could lose up to 20% of total income on transactions. “For a service-based business managing high-value bookings, that’s not something we can sustainably absorb, and it’s certainly not comparable to a café or retail store where average transactions are significantly lower,’’ she says in a letter to her MP, Joseph Mooney. The ban applies to debit, EFTPOS, Visa and Mastercard payments, which Consumer NZ says costs Kiwis an estimated $65m a year. But Keating says many agents were still recovering after the pandemic and airlines, including Air New Zealand (whose on-line credit card surcharges are not affected in the latest move) have removed commissions on agent-issued tickets—a significant component of a client’s travel. “For a business like ours that typically operates on a 10% commission margin, absorbing 1–2% in credit card fees equates to losing 10–20% of our total income on a transaction.”
. . . Other Groups Upset
Hospitality NZ and Retail NZ warn that members are not happy with the change and have told them they will increase prices as a result. Finance Minister Nicola Willis told RNZ that businesses should pass on the cost to customers as they would any other business cost, if they can’t absorb the bill.
. . . Govt Reacts
Commerce and Consumer Affairs Minister, Scott Simpson says the move is aimed at cutting costs for shoppers. The ban does not include on-line sales, payments made with foreign-issued cards or prepaid cards like travel cards. Transactions with these cards can still be surcharged if a business chooses. And he points out the Commerce Commission’s recent move to lower interchange fees is expected to save businesses, including travel agents, around $90 million a year from Dec. “The surcharge ban will ensure these savings are passed on to consumers. A new interchange fee caps for foreign-issued Mastercard and Visa cards, so this will reduce the costs to businesses of accepting these cards.’’ Tourism and Hospitality Minister Louise Upston, who has previously acknowledged the crucial role of the travel trade in the visitor industry, emphasised the push for transparency but added: “We’re committed to continuing to drive growth in tourism to grow the economy and grow jobs for Kiwis. Travel agents and tourism businesses will play a key part in that.”
