Why Oppose the Retail Payment System (Ban on Merchant Surcharges) Amendment Bill
Framed as consumer fairness — functionally concealment. The Bill claims to “protect consumers from unfair surcharges,” but in practice it hides the real cost of payments, burdens small merchants, and expands regulatory power without evidence. It redefines transparency as prohibition and risks replacing open cost signals with invisible, system-wide price inflation. What seems like fairness is in truth a quiet distortion of the market.
Here’s what the Bill does, why it matters, and how it threatens fairness, competition, and transparency in everyday commerce.
Key Principles at Stake
- Transparency: Consumers deserve to see what different payment methods actually cost — not pay hidden mark-ups.
- Fair competition: Small merchants must not be forced to subsidise expensive card systems used by larger competitors.
- Rule of law: Delegated powers must not allow Ministers or regulators to expand bans without full parliamentary scrutiny.
- Economic efficiency: When real costs are visible, markets self-correct. Concealed costs breed inefficiency and distortion.
- Equity: Rural, low-margin, and small traders are least able to absorb hidden costs. This Bill shifts burdens to those with least capacity to carry them.
What This Bill Really Does
- Prohibits visible surcharges: Outlaws charging by payment method — even when costs differ — forcing all consumers to pay blended prices.
- Delegates sweeping powers: Allows the Minister or Commission to extend bans by network, merchant class, or technology without parliamentary approval.
- Overrides existing purpose: Inserts a narrow “transparency, certainty, convenience” clause (s28A) that sidelines competition and fairness goals in the principal Act.
- Relies on weak evidence: The cited “$45–65 million excess surcharges” rests on opaque Treasury and MBIE calculations not publicly tested.
- Ignores timing and transition: Small businesses are bound before interchange fee savings have fully passed through — squeezing margins and survival.
Why This Threatens Fairness and Accountability
- Suppresses price signals: By banning visible surcharges, consumers lose the ability to choose cheaper payment methods.
- Encourages inefficiency: High-cost payment systems face no market pressure to lower fees when their costs are hidden in prices.
- Magnifies inequality: Big chains can absorb changes; small shops must spread costs across all products or close.
- Creates risk of selective regulation: Delegated powers could target specific industries or merchant classes without parliamentary oversight.
- Reduces democratic accountability: Major policy shifts would occur through regulation, not open debate — eroding legislative transparency.
What Good Law Would Do Instead
- Keep cost visibility: Allow reasonable surcharges with clear disclosure to consumers at point of sale.
- Phase in fairness: Begin enforcement only once interchange fee reductions are verified and audited.
- Add safe harbours: Protect small merchants from penalties during transition or unintentional breaches.
- Limit delegated powers: Require Parliament to approve any regulatory expansion — not by ministerial notice alone.
- Ensure data transparency: Publish annual reports showing enforcement actions, refunds, and small-business impacts.
- Review outcomes: Add a five-year sunset clause with mandatory public review of costs, competition, and consumer outcomes.
If You Care About Fairness, Competition, and Transparency
This Bill is not about protecting consumers — it’s about disguising costs. It shifts responsibility from card networks to small traders and from transparency to concealment.
If you believe visibility is the foundation of fairness…
If you believe competition depends on open costs, not hidden ones…
If you believe small businesses deserve equal footing, not forced subsidy…
Then now is the time to oppose this Bill.
“When truth in price disappears, fairness soon follows.” — Ukes Baha
Read the full submission:
Formal Opposition to the Retail Payment System (Ban on Merchant Surcharges) Amendment Bill