Big banks starting to unwind COVID-19 inspired free contactless debit transactions for small business customers

Big banks starting to unwind COVID-19 inspired free contactless debit transactions for small business customers

Two of the country's big five banks will stop providing free contactless debit transactions for small business customers next Tuesday.

All major banks dropped fees on contactless debit transactions in March as the country moved to combat the COVID-19 virus. ASB and Kiwibank say they will resume charging these fees from July 1, next Wednesday.

ANZ and BNZ will continue waiving the fees until the end of July, and Westpac's fees free service runs until September 21.

Via a spokeswoman, Tim Deane, ASB executive general manager for business banking, said "refunding" debit card contactless fees for eligible small businesses would wrap up at the end of June.

"We need to use third party services to provide contactless payments and we are charged for these services. Over this period, we absorbed these charges ourselves, so we could provide this support for free to our customers," Deane said.

"Now that New Zealand has shifted to [COVID-19] Alert Level 1, we have made the decision not to extend the fee waiver. Providing contactless payment acceptance as an option for our customers comes with additional costs, however the benefits our customers get when offering contactless include faster transaction times, convenience and additional security." 

"We are continuing to actively work with the third parties we use to reduce contactless costs," added Deane.

A Kiwibank spokesman said there's no change to the original commitment the bank made to customers in March.

"The fee waiver for Visa Debit contactless payments will apply until June 30. Kiwibank is doing what it can to support small and medium sized businesses as New Zealand moves towards recovery. Improving the sustainability of merchant costs for the long-term is an ongoing priority for Kiwibank product teams," she said.

An ANZ spokeswoman said: "In March we announced we were waiving the fee for contactless debit transactions for eligible small business customers until the end of June. We are extending the period until the end of July."

A BNZ spokesman said: "We are committed to supporting our SME customers and we have extended the contactless debit transaction fee waiver until the end of July for small and medium businesses. We are continuing to look at ways we can support our SME customers and help them adopt new payment technologies."

And a Westpac spokesman said: "Our contactless debit fee waiver goes through to September 21. Westpac also implemented a minimum monthly merchant service fee waiver in April and May.

When they were announced in March the banks' moves were welcomed by businesses. For retailers, for example, card acceptance fees are typically the third highest cost of doing business after wages and rent. And removing the need to touch payments terminals was good for public health during a pandemic.

However, fees for contactless credit card transactions were left in place. According to Retail NZ, weighted average merchant service fees come in at 1.1% for contactless debit transactions, and 1.5% for credit transactions. 

In April banks, Visa and Mastercard increased the limit on contactless card payments to $200 from $80, for as long as necessary during the COVID-19 pandemic. This continues.

The combination of banks waiving fees and increasing the limit on contactless card payments, is unlikely to prove to be good news for EFTPOS, which provides free transactions for merchants.

With banks giving contactless transactions away for free, many merchants who normally wouldn't offer them to customers because of the cost have embraced contactless payments. This means more consumers are experiencing the ease and convenience of making contactless payments instead of paying via EFTPOS, which involves inserting their cards into payments terminals, and utilising mag-stripe technology.

In April an executive with high level experience in the payments sector told interest.co.nz he worried this could ultimately be the death of EFTPOS. Especially if the fee waiving goes on beyond the initial three to six months proposed by the banks.

"Coronavirus is almost disastrous in the sense of the demise of EFTPOS," the executive said. "With more and more [payments] terminals being activated [for contactless payments] people will develop the habit...[And] the banks essentially don't see a future [in EFTPOS] because it doesn't drive any revenue for them."

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23 Comments

This is an outrage, the banks should help STOP COV_19, its still out there and with the bad management of quarantine, there is still a chance of an outbreak.
The banks are making big profits and forgetting about people.
Customers of ASB and Kiwibank should complain to them and even threaten to take their business elsewhere, if they donot change their minds.

Can’t they wait at least another quarter or two to help out obviously struggling businesses?

I think they are one of those struggling businesses.

Are you kidding? At branch level, they are just ordinary people doing their jobs, often under pressure to hit targets, but at board level, they are sharks. The list of wrongdoings by banks everywhere is long and grubby. Fining them is no use; you have to make the directors financially accountable and with the real threat of jail time.

Can't see the problem here. SME's put there prices up to cover the cost, we the public pay more for the same goods and services, hey presto we have inflation and the deflation boogie man has been defeated.

fees for cards are a disgrace. Using credits and bank services mean that the RBNZ does not need to print a large quantity of notes and coins that would otherwise be needed. The RBNZ and the private banks must come to an agreement for a fair price to be paid by the RBNZ to banks for their services and it must be provided free of charge to everyone who wants to do business inside NZ.
The banks charge ridiculous fees because individual customers do not have power to challenge them.

No one pays fees to use normal cards. It's the Visa schemes that are raking it in

Lmao the state owned bank.

"Be kind"

Amazing - banks think it is OK to charge people for using their own money!

For crying out loud! What other fees are they loading onto the accounts? Time for a Royal Commission to look into bank charging and practices in NZ?

Going by the Results found in the Australian Banking Royal Commission In 2018 it wouldn’t paint a pretty picture.

They arent using their own money really. Contactless goes through VISA scheme and most of these are credit cards. EFTPOS = Free, no scheme to go through.

[And] the banks essentially don't see a future [in EFTPOS] because it doesn't drive any revenue for them." Banks are bloodsuckers on a huge scale.

Parasites.

Banks are creators of the money supply anyway...

I am curious to what the extra security is. Someone steals your card , the can paywave away till the card is notified stolen .How is that more secure than needing a password?

Saving is for fools, Borrowing is for the wise, Spending is for us and Profits are for the Banks.

What the hell is going on here? Am I the only one to spot that some joker called SexyCat21 has put up a link to a pornographic site? Shut it down NOW.

Take a chill pill.

It is a pretty regular occurrence.

Stop clicking on it .

Thanks kiwibank for charging us the minimum merchant fee in may while we had no sales or transactions through the machine. Pricks!

I imagine getting a rebate on that would have generated some good will from small business. Instead they get the opposite.

Oh good, this might generate some inflation.

(this is a semi-serious, yet ironic post, I think these fees are lecherous)

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