Merchant fees for Eftpos have gone up. Photo / Martin Sykes
Merchant fees for Eftpos have gone up. Photo / Martin Sykes
Auckland Chamber of Commerce chief executive Michael Barnett says Paymark's almost 30 per cent price hike to its monthly Eftpos merchant fee is a poor move and hits small business at a time when it is already struggling.
Paymark, which processes 75 per cent of the country's electronic card transactions,has increased the fee to use an Eftpos terminal from approximately $14 to $18 per month.
One business said its fee had increased from $16.10 to $20.70 per month.
But the Kiwi-founded, French-owned payments company has defended the move, saying it has not increased its fees for retailers since 2017.
Back then it increased its fee by 50 cents, compared to $4 this time around. The increase works out to be a 28 per cent hike.
Paymark said it advised its customers in July that it would be increasing its monthly access fee by $4 per month - per terminal - to $18 for unlimited transactions.
"We have not put the fee up for several years and held off raising the fee during the worst of the Covid outbreak. However, with continuing compliance and security obligations an ever present battle, we have no choice but to increase the monthly fee if we're to offer our retailers the fastest, most secure mechanism for transferring funds," the company said.
Paymark would invest the additional funds into "continually upgrading technology and security to ensure New Zealand's payments network remains a safe, secure and reliable method of processing transactions", it said.
While an additional $4 per terminal per month does not seem like a significant increase, Barnett said it was another cost adding to an already increasing outgoings bill, and many small- and medium-sized businesses were still hurting from the impact of Covid-19 lockdowns.
Paymark is the country's largest electronic payments network and was previously owned by the four big banks - ANZ, ASB, BNZ and Westpac. It was acquired by Paris-based Ingenico Group for $190 million in 2018.
"It appals me that anybody is looking at significant price increases right now, and especially for the small-to-medium business sector - they've had a hard six months and they are in a rebuild and recovery [phase]," Barnett told the Herald.
"They already are going to face increased government charges; minimum wage, sick leave, and then you get something like this. It's a semi-captive market and they don't have a lot of choices and can't switch."
Michael Barnett, chief executive of the Auckland Chamber of Commerce. Photo / Supplied
Barnett said the price hike had poor timing and was "administratively untidy".
"At a time where they need support you've got activity like this - it doesn't matter whether it is $1 or $5, it is an increase that could have been held back or done incrementally over the next 12 months.
"They could have been increasing the fee 50 cents each year since 2017 - that would have worked for most small businesses, but instead of that they have left it and now there are going to be businesses left with big increases - they are trying to do a catch up in revenue and small business are going to have to pay."
Small business was a "captive market" for Paymark as they did not have the resource to switch, which meant there was no way to dodge the increase, he said.
