3 August, 2020
Westpac NZ lowers merchant fees for small businesses
Westpac NZ is rolling out a new merchant fee pricing structure that will lead to cost savings for more than 10,000 small and medium Kiwi businesses, and could make contactless transactions more widely available for customers.
On 1 September, most businesses will be moved on to a new “blended” merchant service fee, which will provide separated pricing depending on the transaction type.
Merchants on this pricing structure will be charged a new maximum rate of 0.60% on contactless debit transactions, and contactless credit transactions will cost less than standard credit transactions.
Contactless debit transactions make up the majority of processed transactions for which a merchant service fee is charged.
Westpac NZ Customer Experience Hub General Manager Karen Silk says the bank has listened to its small business customers and delivered a fair and transparent pricing system.
“The new fees better reflect the costs associated with processing the different card and transaction types and will lead to real savings for many businesses, in particular smaller businesses where transaction volumes are lower and as a result costs have been traditionally higher,” Ms Silk says.
“For example, a café owner with relatively low volumes of transactions may have paid 10 to 15 cents in fees when processing a debit contactless payment for a $5 coffee. Now, they will only pay 3 cents.”
“We also know there has been increased public demand for contactless debit transactions for health and hygiene reasons since the Covid-19 outbreak.
“Our new changes make contactless sales more accessible to merchants, which is great for them and great for their customers.”
In March, Westpac announced a six-month fee waiver on all contactless debit transactions for businesses with an annual turnover of less than $500,000. Those businesses will join others on the new pricing structure when their waiver period ends on 21 September.
“This new pricing has been enabled by a technology change at Westpac, which has also coincided with independent reductions to interchange and card scheme fees (set by Visa and Mastercard) and acquirer fees (the merchant’s bank),” Ms Silk says.
The acquirer’s fee covers costs to the acquiring bank such as fraud prevention, merchant support, payment processing and technology costs.
Westpac’s small and medium business customers will be contacted in the coming weeks with details of what the changes will mean for them.