Well, maybe not the end of cash but it’s certainly another step closer.
Historically, merchant service fees in New Zealand have been unregulated. This has added a cost for retailers who can either pass that on through higher prices, or add ‘no paywave’ signs at the till.
A big part of the merchant service fee is interchange (that’s the fee paid by the merchant to the card issuer (your bank) when you make a card purchase). Soon, the interchange fee will be capped at 0.8% for credit card payments - in line with Australia - and the interchange fee for online debit card transactions at 0.6%.
The Government aims to bring in the changes in 2022, and estimates the changes will save businesses $74 million a year.
Here at SquareOne towers, we predict that, with these lower fees, contactless acceptance will increase. That means it’ll make it easier for merchants, and much easier for all our members, to keep moving in a contactless, cashless world.