Covid-19

Some banks raise paywave limits, but fees stay

Most banks are increasing the contactless threshold for Paywave and Paypass cards, but most are still charging the high credit fees that discourage dairies from using them

More paywave transactions will be made contactless after banks raise the threshold for keypad-free transactions from $80 to $200 today.

Payments NZ Chief Executive Steve Wiggins said the changeover would start from today. The majority of paywave customers would be able to use that new threshold by the end of next week. 

Wiggins said the threshold had been successfully tested at supermarkets and fuel stations over the past 48 hours. 

"We were really pleased with how the tests went. Which meant that we could make that 'go' decision late yesterday," Wiggins said.

Supermarket chains raised the issue with banks in the lead-up to the lockdown and after they noticed people were shopping less, but spending more each transaction. 

"We've had overwhelming support from across the industry. It's a way that we can help in some way of reducing that spread of Covid-19 and also to reduce queuing times those sort of things," Wiggins said. 

He said the move would make a significant number of transactions pin-pad free. One in five paywave transactions fell between $80 and $200 before lockdown. 

Wiggins said cards from ASB and TSB banks had the $80 paywave limit hardwired in as an added layer of security.

At launch those cards wouldn't be able to make contactless paywave transactions at the new limit, but would be able to through mobile payment apps. Cards issued by those banks from April 9 onwards would have the new threshold built-in.

Before today, customers who spent more than $80 each shop had no choice except to touch a keypad to punch in their pin number. Covid-19 can survive on hard surfaces like keypads for several days.

"The new limit will remain in place for as long as necessary," Wiggins said.

Australia first

Australia raised its own paywave thresholds from $100 to $200 on April 3 after supermarket chains Woolworths and Coles successfully lobbied the government for the change.

However Wiggins said New Zealand wasn't far behind. 

"The fact that they may have put a media release out last week doesn't mean that they're actually ready," Wiggins said.

"Their industry was working towards a date of Tuesday April 4. So we're only really a couple of days behind where they are," he said.

Fees still an issue

Kiwis retailers pay more than triple the contactless fees their retail counterparts in the United Kingdom do.

That's why smaller retailers like dairies still slap 'no paywave' signs on paywave-capable machines.

Source: 2019 Retail NZ Payments Survey 

Banks have moved to wipe fees attached to contactless debit cards during the Covid-19 pandemic. ANZ, BNZ, ASB and Kiwibank removed paywave fees on debit card payments until the end of June; Westpac went further and waived fees for six months.

However, as Newsroom previously reported, those fees remained in place on credit cards. Many dairies kept 'no paywave' signs in place to avoid incurring those fees.

Unregulated industry sets fees

Wiggins said Payments NZ had no role to play in setting credit card fees and queries on those were better directed at the banks and credit card companies. 

"Those other jurisdictions are regulated. Which is not the case here," Wiggins said.

"We're a self-governing body within this jurisdiction and sort of letting the market determine where those fees should land," Wiggins said.

Australia's Reserve Bank regulated PayWave and Paypass fees lower years ago and all retail outlets accept contactless cards without extra costs over the Tasman. Contactless Visa and Mastercard cards are also widely used to pay for buses and trains in Sydney and London because fees have been regulated low enough for widespread acceptance by retailers.

Prime Minister Jacinda Ardern said earlier in the week that washing after shopping trips would still be important regardless of whether transactions were contactless or not. 

"Every time you go outside. When you return, wash your hands," Ardern said.

"I cannot say that often enough," she said.

Help us create a sustainable future for independent local journalism

As New Zealand moves from crisis to recovery mode the need to support local industry has been brought into sharp relief.

As our journalists work to ask the hard questions about our recovery, we also look to you, our readers for support. Reader donations are critical to what we do. If you can help us, please click the button to ensure we can continue to provide quality independent journalism you can trust.

Comments

Newsroom does not allow comments directly on this website. We invite all readers who wish to discuss a story or leave a comment to visit us on Twitter or Facebook. We also welcome your news tips and feedback via email: contact@newsroom.co.nz. Thank you.

With thanks to our partners