Submissions sought on Retail Payment System Bill

09 November 2021

The Retail Payment System Bill (the Bill) has passed its first reading in Parliament and is now before the Economic Development, Science and Innovation Select Committee. 

Submissions are due by 25 November 2021.


The Bill is designed to address concerns that merchant service fees for online or contactless transactions are too high, particularly when compared to Australia.

Key features


  • Commerce Commission as regulator. The Commission will have responsibility for:
    • monitoring competition and efficiency
    • conducting inquiries, reviews and studies
    • publishing reports, and
    • assisting and cooperating with other agencies.
  • The Bill applies to “retail payment networks”, defined as: “the participants, arrangements, contracts, and rules that facilitate a class of retail payment.

Network designation

  • The Bill empowers the Government, on the recommendation of the Commission, to designate retail payment networks for regulation under the regime. Before recommending a network for designation the Commission must:
    • consult the Reserve Bank of New Zealand if the network comprises any part of a designated financial market infrastructure1
    • notify an operator of the network, and
    • consider any submissions made.
  • Once a network is designated, the Commission has the power to issue “network standards”. These may apply to particular participants, particular networks, or to designated networks generally. When setting standards, the Commission must take into account the effects of designation on efficiency, competition, and innovation.
  • Network standards may relate to:
    • disclosure of information relating to payment services or the designated network
    • pricing for payment services, including pricing principles, limits on fees, and pricing methodology requirements, and
    • access requirements for a designated network.
  • Participants in designated networks are subject to direction from the Commission to set or amend network rules.

Merchant surcharges

  • The Commission will be empowered to issue merchant surcharging standards (Standards) which impose requirements on merchants that use payment services for retail payments.
  • The Standards may relate to:
    • disclosure of information relating to payment surcharges
    • requirements that merchants represent, and limit, surcharges in the manner set out in the Standard, and
    • requirements that merchants retain records as to how surcharges are calculated.

Our comment

The Bill will affect a wide range of participants in New Zealand’s payments ecosystem – beyond the major card issuers and banks to alternative payment system operators.

As currently drafted the Bill gives the Commission broad-ranging powers. There is also a question around how the Bill would interact with the Financial Markets Infrastructures Act 2021 and whether some entities might be caught by both regimes, with overlapping obligations monitored by different regulators.

We encourage affected parties to make submissions on the Bill.

Next steps

If you would like more information on what is proposed, or assistance with preparing a submission, please get in touch with one of our contacts.

Quick links

Retail Payment System Bill

Financial Markets Infrastructure Act 2021


1 See the Financial Markets Infrastructure Act 2021.

Related insights

See all insights