Subj : Check before you tap: Consumer warning over PayWave surcharges
To   : All
From : News
Date : Mon May 20 2024 12:51 pm

PayWave - the ability to make a purchase with the tap of a credit or debit
card - has taken off in recent years, but with convenience, there is always a
cost.


Now, most payment machines display a sign warning of a surcharge - and that
surcharge is not the same everywhere.


The standard PayWave surcharge in New Zealand is 2.5% of the price of a
purchase. At Remedy Coffee in Auckland city centre, the surcharge is 1.8%.


Owner Richard O'Hanlon said most customers still used the service.


He told First Up he saw PayWave emerging in the two years before 2020.


"And then after Covid, when everything became contactless, that's when it
really hit in."

His business pays a flat fee to the Eftpos company to use its system, but it
is actually the merchant service fees charged by the banks that cover credit
card and PayWave transactions that cost them the most money.


"On a quiet month, that can be $2000, $3000, and on a busy month that can be
$3000 to $4000 that we have to pay as a business.


"And as a small independent coffee shop where rates are going up, wages are
going up - which they should do - everything's going up. Milk, coffee. We
have to then find a way of finding that amount of money."


O'Hanlon said big businesses like supermarkets and fast food chains did not
bother with the surcharges because of their high volume of sales.


However, smaller outfits like his had to consider their costs carefully.


The amount retailers tack on for their surcharge is at their discretion - but
Consumer NZ's Jessica Walker said the surcharge should never be more than
2.5%t.


"We've done some maths and after conversations with the Commerce Commission
where we've landed is 2.5%," she told First Up.


"So anything above 2.5% we would say is within the realms of excessive, but
we wouldn't expect many people who are paying by credit card to be paying
2.5%.


"I think that most people should be seeing like 1.5%, 2%, seems to be about
the norm, but we have had complaints from people who are paying well above
that 2, 2.5% surcharge."


Consumer NZ said any surcharge should be clearly displayed, and asked people
to get in touch if they were charged more than 2.5% when they used PayWave.


Unlike Remedy Coffee, the popular Vietnamese restaurant Tem, also in central
Auckland, does not have a surcharge for PayWave.


Co-owner Tina told First Up she was happy to cover the cost herself.


"I try and make the customer happy," she said. "Because now there's lots of
competition, a lot of food around.

"Although you cook good, you look good, your food is healthy, your food is
good, but people will look at the money."


Apps like Apple Pay on cell phones have made PayWave even easier. Several
people who spoke to First Up did not even use a wallet.


"I just don't carry my credit card. I just have my phone all the time," one
person said.


"I'd rather leave my credit card at home... I never lose my credit card then."


However, another said they inserted their card and entered their pin unless
they were "basically on the town drinking".

"It's like, how much do I value my time? It's 30 cents for an average
transaction and it takes six seconds. So if you multiply that out to the
hour, that's a lot of money... much less discipline when I'm drinking."


By RNZ's Leonard Powell

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