Latest / Best of Business / Carolyn Young: Retail NZ Chief Executive on the Commerce Commission announcing new regulations for interchange fees

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Carolyn Young: Retail NZ Chief Executive on the Commerce Commission announcing new regulations for interchange fees · Best of Business

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  Speaker 2: Credit cards charges no one likes them. The Commerce Commission
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  Speaker 2: has decided to lower the cost of interchange fees for
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  Speaker 2: Visa and MasterCards. They reckon this will save businesses around
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  Speaker 2: ninety million bucks a year, and that could save each
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  Speaker 2: business five hundred dollars on average. Carolyn Young is Retail
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  Speaker 2: and Z chief executive with me this afternoon.
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  Speaker 3: Hi, Carolyn Kurider Ryan, Thanks for having me on board.
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  Speaker 2: So is this going to make a major difference to businesses?
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  Speaker 3: Look, it's kind of two really tailers and that you know,
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  Speaker 3: what we really want to make sure that we see
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  Speaker 3: is that we do see those lower fees come through
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  Speaker 3: in the bank statements for retailers, and then what consumers
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  Speaker 3: are going to want to see is that we'll see
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  Speaker 3: lower surchargings to reflect that. So that would be the
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  Speaker 3: one one opportunity for everyone. And the key thing is
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  Speaker 3: how do we make sure that that's happening. That's going
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  Speaker 3: to be the critical factor.
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  Speaker 2: And know, I guess the proof will be in the pudding.
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  Speaker 2: But the fact that the ComCom has already stepped back
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  Speaker 2: from because remember the last time we spoke, it was
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  Speaker 2: two hundred and sixty million dollars in savings. They were
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  Speaker 2: thinking now we're at ninety that presumably that's pressure from
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  Speaker 2: the industry.
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  Speaker 3: Look when you look at the report they put out today,
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  Speaker 3: there are some differences between what they had proposed in
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  Speaker 3: their draft decision to where their final places position, and
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  Speaker 3: so that's part of it. So they haven't addressed any
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  Speaker 3: of the commercial credit card fees that's left uncapped, and
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  Speaker 3: that could be in that quite a high percentage of things.
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  Speaker 3: And the international cards they some of those cards, the
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  Speaker 3: debit cards for international fees they are still quite high.
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  Speaker 3: So overall there's been a little bit of movement up,
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  Speaker 3: so you know, less savings for the whole economy, so
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  Speaker 3: for retailers and for consumers. And what we do need
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  Speaker 3: to make sure is that this is one part of
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  Speaker 3: the merchant service fee. There's about five or six fees,
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  Speaker 3: depending on how you've structured your payment portfolio, that make
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  Speaker 3: up the merchant service fee. The COMMICS commissioners said they
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  Speaker 3: want to get that fee down to one percent maximum.
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  Speaker 3: Our recommendation to the COMMICS Commission and our submissions was
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  Speaker 3: that regulate the total fee, make it one percent, make
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  Speaker 3: it really flat and easy for everyone. Then you can
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  Speaker 3: just implement a standard sero charge where it can be
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  Speaker 3: a maximum of one percent and everyone knows where they stand.
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  Speaker 3: Because it's really really complicated, and we would.
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  Speaker 2: Get that too, because at the moment, some retailers are
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  Speaker 2: charging two and a half percent to charges and more
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  Speaker 2: for what the ComCom has said that should be a
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  Speaker 2: maximum of zero point seven percent debit card to charge
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  Speaker 2: retailers clipping the.
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  Speaker 3: Ticket here or what. No, you're just talking about the
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  Speaker 3: interchange fee, which is only one part of the merchant
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  Speaker 3: service fee. So depending on the type of card that
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  Speaker 3: you're that the customers paying with, the bank that they
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  Speaker 3: come from, who your payment system runs through, you know,
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  Speaker 3: is it a master Card, is it a Visa, is
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  Speaker 3: it an AMEX, is it overseas card? You know, all
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  Speaker 3: of those factors all mean that it can be a
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  Speaker 3: different fee that's applied through. So debit is different to credit,
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  Speaker 3: and it's different if it's MX versus master Card or Visa,
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  Speaker 3: and it's different if it's an overseas card. So there's
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  Speaker 3: lots of permeations that roll through. So understanding that whole
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  Speaker 3: piece is super complicated, and what retailers and merchants really
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  Speaker 3: want is a simplified system that everyone can understand.
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  Speaker 2: Great clarity, you reckon all it will.
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  Speaker 3: That'd be great, Like we would all know that the
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  Speaker 3: total fee you might be charged on average would be
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  Speaker 3: one percent, and therefore, if a business wanted to put
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  Speaker 3: in place a surcharge, they would know that that was
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  Speaker 3: the surcharge that they could put in place. Consumers would
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  Speaker 3: also they know that that's all that they could be charged.
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  Speaker 2: Appreciate your time, Carol and Young, Retailings, Chief Executive.
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