Hospitality New Zealand Bay of Plenty regional manager Alan Sciascia. Photo / Supplied 100820LT1.JPG
Retail NZ chief executive Greg Harford. Photo / Mark Mitchell A_110620NZHMMHARFORD5.JPG
Tauranga Chamber of Commerce chief executive Matt Cowley. Photo / George Novak A_210720gn22bop.JPG
Springfield Superette owner and councillor Raj Kumar. Photo / Andrew Warner A_150620aw02.JPG
By Zoe Hunter
Bay businesses being stung by high contactless payment bills say they are facing a "two-edged sword" while one owner who got rid of it faced verbal abuse and "hysteria" from customers.
The backlash comes hard on the heels of Small Business Minister Stuart Nash and Prime Minister Jacinda Ardern's announcement during their visit to the region last week that if re-elected Labour would crack down on merchant service fees charged to retailers.
Store owners say contactless payment was a necessity post-lockdown and they were now seeing paranoid customers press in their pin numbers with credit cards or ballpoint pens if there was no tap-and-go.
But they say the cost to comply is an "unnecessarily high expense" and although it was convenient, the price should be evenly shared between lenders, banks and retailers.
The Whipped Baker co-owner Francis Cooper said she paid $250 a month for contactless payment on a three-month trial pre-lockdown.
"I didn't really realise how much of a percentage it was going to be until we got our first bill."
Cooper said it was money she could have spent on paying an extra staff member.
"We couldn't justify it so we just took it away."
But in order to start trading again after alert level 4, the bakery needed a contactless payment option.
"We had to get it in just so we could operate. It was actually a necessity."
She said one customer used her own credit card to press the buttons when the service wasn't operating one day.
"People look twice if they have to push the buttons."
The cafe was now expanding to open a cashless kiosk in The Kollective, operating only through card payments.
"It means we are having to pay $350 a month just to have these facilities.
"Our cafe is busy and we need more staff to help clean but all of the expenses add up."
Cooper said businesses already had to pay merchant fees, Paymark fees, eftpos fees and now contactless payment fees and "it would be huge for businesses" if the Government delivered on the promise.
Hennessy's Irish Bar owner and Hospitality New Zealand Bay of Plenty president, Reg Hennessy, said it was an "unnecessarily high expense" to all operators and a revision of charges was "well overdue".
"We are paying double what Australian businesses pay.
"What's even more painful is that we added this facility to Hennessy's after the first lockdown to keep people safe and fight the virus."
Springfield Superette owner and councillor Raj Kumar said his dairy had contactless about three years ago but he had since got rid of it.
"Sometimes you just want to keep up with the trend. But a lot of people are using other people's cards. It might be easier for the customer but it just means anybody can use it [your card]."
Kumar said while 95 per cent of customers were okay with having no contactless payment option there was "a little bit of hysteria".
"Some people get really paranoid when they come into the shop. One person said it was like walking into the dark ages, that's how rude he was to my wife."
He said he had also seen someone pulling out a ballpoint pen to press the buttons on the eftpos machine.
On the other hand, he said, people were still getting money out of an unmanned ATM and were still handling money.
"Whether we have payWave or not... as a society we are still talking about cash."
Hospitality New Zealand Bay of Plenty regional manager Alan Sciascia said contactless was a "two-edged sword".
"Many customers like the convenience and apparent safety of the process while retailers are carrying an increased cost to provide the service.
"Retailers have to juggle that decision as to whether the increased cost is justified or can even be afforded."
Retail NZ chief executive Greg Harford said regulating merchant fees was good news for any business accepting card payments and for consumers.
"Ultimately, the costs of merchant fees are generally spread across all consumers, including those who don't pay by credit or contactless debit cards.
"Customers really like payWave, because it is convenient and quick. In these Covid-19 times, it also has the advantage of meaning customers don't need to touch the Eftpos terminal for transactions worth less than $200."
Harford had seen a big increase in takeup of contactless payments by retailers since the start of the pandemic and in the use of contactless by customers.
Merchants will likely get the best outcomes if they are on an Interchange Plus rate, he said.
"The precise rate will vary a bit depending on the mix of cards in a business, but merchants who are paying more than around 0.6 per cent for in-store contactless debit and 1.4 per cent for credit transactions are probably paying too much (and many are)."
Tauranga Chamber of Commerce chief executive Matt Cowley said there would likely be a lot of support from retailers.
"Generally speaking, limiting the free market could risk these companies investing in innovation in the future. But this is not a risk if the restrictions bring us into line with similar countries."
Cowley said contactless was becoming an expectation of customers.
"It is exciting as it becomes more convenient, as long as the costs can be evenly shared with the lenders, banks and retailers."
New Zealand Bankers' Association chief executive Roger Beaumont said he looked forward to seeing the detail of the proposal in "this complex area" and would be happy to engage in any consultation.
"These fees currently provide benefits for consumers including the cost of fraud reimbursement and loyalty schemes."
The NZBA has 17 banks as members, including the four major Australian-owned banks, as well as Kiwibank, SBS, Co-operative and TSB.
Labour's Small Business Minister Stuart Nash said retailers were estimated to pay on average $13,000 more than their Australian counterparts each year on merchant service fees.
"This needs to change. The point where customers transact with businesses is a source of both health and economic concern.
"Contactless payments give customers and businesses greater peace of mind as we all work to eliminate the virus."