Retail Payment System (Ban on Merchant Surcharges) Amendment Bill

Retail Payment System (Ban on Merchant Surcharges) Amendment Bill The Parliament of New Zealand enacts as follows: 1 Title This Act is the Retail Payment System (Ban on Merchant Surcharges) Amendment Act 2025 . 2 Commencement This Act comes into force 1 month after Royal assent. 3 Principal Act This Act amends the Retail Payment System Act 2022. 4 Section 3 amended (Purpose) In section 3, insert as subsection (2): 2 However, see section 28A . 5 Section 4 amended (Purpose and principles of exercising functions and powers under this Act) In section 4(1), after for the purpose set out in section 3 , insert (but see section 28A ) . 6 Section 5 amended (Overview of this Act) Replace section 5(c) with: c prohibits merchants from charging payment surcharges in certain circumstances; and ca in cases where payment surcharges are not prohibited, enables the Commission to regulate them; and 7 New subpart 1AA inserted in Part 3 In Part 3, before subpart 1, insert: 1AA Payment surcharge prohibited in certain circumstances 28A Purpose of this subpart 1 The purpose of this subpart is to prohibit payment surcharges in certain circumstances where it is in the interests of transparency, certainty, and convenience for consumers. 2 In this subpart, the purpose set out in subsection (1) applies in place of the purpose set out in section 3. 3 The functions and powers of the Commission and the Minister in relation to this subpart must be exercised for the purpose set out in subsection (1) . 28B Payment surcharge prohibited in certain circumstances 1 A merchant must not charge a payment surcharge to a consumer in any of the following circumstances: a the consumer, using a debit or credit card, makes a retail payment using a card-present payment method transacted via an EFTPOS network, a Mastercard network, or a Visa network: b in any other circumstances prescribed in regulations made under section 54. 2 Subsection (1)(a) does not limit the circumstances that may be prescribed for the purpose of subsection (1)(b) . 3 In this section,— card means any physical, digital, or tokenised payment credential card-present payment method means a payment method where— a the consumer and their card are present at the merchant’s physical point-of-sale device (including any unattended point-of-sale device) at the time the payment is initiated; and b the consumer’s card is electronically read by the merchant’s physical point-of-sale device EFTPOS network means a retail payment network known as EFTPOS to the extent that it facilitates transactions made using a debit card by— a swiping a magnetic stripe on the card, or inserting the card, in the point-of-sale device; and b selecting a cheque or a savings account; and c then entering a personal identification number ( PIN ) Mastercard network means a retail payment network known as Mastercard debit or Mastercard credit of which the person known as Mastercard International Incorporated is a network operator Visa network means a retail payment network known as Visa debit or Visa credit of which the person known as Visa Worldwide Pte. Limited is a network operator. 28C Consumer’s right of redress If a merchant charges a payment surcharge in contravention of section 28B ,— a any provision of a contract requiring the consumer to pay the surcharge is unenforceable; and b the contract for the purposes of which the payment is made is treated as providing for the surcharge to be repaid to the consumer. 28D Pecuniary penalty for contravention 1 A merchant who contravenes section 28B is liable to a pecuniary penalty. 2 See subpart 3 for further provisions about pecuniary penalties. 28E Notice to take corrective action 1 If satisfied that a merchant has failed to comply with section 28B , the Commission may, by written notice given to the merchant, require the merchant to take any steps specified in the notice to— a remedy the non-compliance; or b ensure that the non-compliance is not continued or repeated. 2 The notice must specify a reasonable period (a specified period ) within which the required steps must be taken. 3 A merchant given a notice must comply with the notice within the specified period. 4 A merchant that contravenes a notice is liable to a pecuniary penalty. 5 See subpart 3 for further provisions about pecuniary penalties. 8 Section 29 amended (Purpose of this subpart) Replace section 29(1) with: 1 The purpose of this subpart is to ensure that, where payment surcharges for payment services are not prohibited under section 28B , payment surcharges are no more than the cost to the merchant of the payment services used for accepting retail payments. 9 Section 30 amended (Commission may issue merchant surcharging standards) After section 30(3), insert: 3A A merchant surcharging standard does not apply to any circumstances in which a merchant is prohibited under section 28B from charging a payment surcharge. 10 Section 34 amended (Amendment and revocation of merchant surcharging standards) In section 34(a), after minor nature only , insert or is necessary or desirable for consistency with regulations made for the purpose of section 28B . 11 Section 40 amended (Pecuniary penalty orders for contraventions of merchant surcharging standards) In the heading to section 40, after contraventions of , insert the prohibition in section 28B and . Replace section 40(1)(a) with: a contravened the prohibition in section 28B or a merchant surcharging standard; or Replace section 40(1)(b) with: b been involved in a contravention of the prohibition in section 28B or a merchant surcharging standard. 12 Section 41 amended (Pecuniary penalties for contravention of notice to take corrective action) In section 41(1), replace section 35(1) with section 28E(1) or 35(1) . 13 Section 54 amended (Regulations) After section 54(1)(a), insert: aa prescribing, for the purposes of section 28B , other circumstances in which a merchant must not charge a payment surcharge: After section 54(2), insert: 2A The Minister may make a recommendation for regulations under subsection (1)(aa) only if, in addition to the consultation required by subsection (2), the Minister— a has consulted the Commission; and b has had regard to— i the purpose set out in section 3; and ii any merchant surcharging standards that may be affected by the proposed regulations. 2B Circumstances prescribed under subsection (1)(aa) may relate to any 1 or more of the following: a a particular payment method or class of payment method (for example, using a card online): b a particular payment product or class of payment product: c a particular payment network or class of payment network: d a particular merchant or class of merchant (for example, its size or type): e any other circumstances of the retail payment. 2C If the Minister recommends the making of regulations under subsection (1)(aa) , the Minister’s reasons must be published together with the regulations.