Check before you tap: Consumer warning over PayWave surcharges

By Leonard Powell of and is republished with permission

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.

Consumer NZ says any surcharge should be clearly displayed. Photo: RNZ / Leonard Powell

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 percent of the price of a purchase. At Remedy Coffee in Auckland city centre, the surcharge is 1.8 percent.

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.”

Consumer warning over PayWave surcharges

Remedy Coffee owner Richard O’Hanlon. Photo: RNZ / Leonard Powell

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 percent.

“We’ve done some maths and after conversations with the Commerce Commission where we’ve landed is 2.5 percent,” she told First Up.

“So anything above 2.5 percent 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 percent.

“I think that most people should be seeing like 1.5 percent, 2 percent, seems to be about the norm, but we have had complaints from people who are paying well above that 2, 2.5 percent 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 percent when they used PayWave.

Consumer warning over PayWave surcharges

Tina and Tom at Tem Vietnamese. Photo: RNZ / Leonard Powell

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.”

Sometimes when a business is growing, it needs a little help.

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