Carolyn Young: Retail NZ CEO on ACT confirming the Government's hit pause on the surcharge ban

G'daftanun, the government's credit card surcharge ban

might have just been given a last-minute reprieve.

It was declared dead this morning

because ACT had pulled support for it.

But now Labour has said it might yet support it.

It sounds like only if the banks absorb the fees.

Carolyn Young is the CEO of Retali and Zed

and with us, hi, Carolyn.

Kia ora, would that work?

Can the banks be forced to absorb the fees?

I think it's unlikely that that's going to happen,

but look, that would be a good outcome for everyone

if that was possible, wouldn't it?

Because from a consumer and a merchant perspective,

they wouldn't be having to bear those increased costs

for the higher technology

that's been introduced through contacts payments.

Why is it unlikely to happen?

Well, because, you know, if you talk to any bank,

they're going to say to you that to develop

and the credit card companies, they're going to say to you

that to develop safer, more technologically friendly solutions

for people to make payments.

It costs, it takes investment and funding

to be able to do that.

So, for example, part of the reason why F-POS

has been declining in terms of the volume

that goes through that those rails is because

it's a very static program,

that nothing's changed in 30 years or virtually

nothing has changed in 30 years.

So it feels and looks the same to everyone.

And there's been no investment from the banks

because there's no revenue from them generated in that space,

whereas in terms of when you look at

contactless payments being able to play through a wallet

or through tap and go or, you know, ins众,

which is the way you want to pay.

All of those different methods come through

with technology and investment

and therefore there's significant fees

that have been attached to them.

And of course, a lot of that escalation and use

happened through a post-COVID

where we were concerned about, you know, contacting people

and touching things and all of those sorts of areas.

So there was a great escalation in the use at that time.

And now you see, you know, 10 years ago,

45% of transactions were done via credit.

And now, you know, 10 years later,

21, sorry, 71% of transactions go through either

through a wallet, through contactless or through credit.

And so that's a big portion that's got a significant fee

and that's the big change in what retailers have experienced

in terms of the fees that they're paying,

paying back through to the banks and credit card companies.

Does it worry you that Labor has come to the rescue here

potentially?

Look, if they can get the banks to absolve the fee

that would be a great outcome,

when absolutely 100% have set support for the retailers.

Given that you don't think that it's possible,

they may have just come to the rescue

to force a thing through that act is just effectively

killed off and thank God for that.

But they may in fact revive a bad thing.

I don't think they will.

They won't revive it as it is.

We've had a couple of conversations

with Arianna Williams and certainly there was no way

that they were going to support it as status quo.

So we've reached out to her today

and waiting to speak to her further on her suggestions.

Excellent. Carolyn, thank you very much.

Appreciate it, Carolyn.

Retail NZ CEO.