Statement on surcharging from MasterCard Worldwide
Auckland, 14 January 2010: In order to settle litigation brought against it by the Commerce Commission, MasterCard recently changed its rules to permit New Zealand merchants to impose a surcharge on the use of MasterCard cards.
Under the new rules, merchants who choose to surcharge are required to inform their customers of the added charge before the completion of the transaction, and the amount of the surcharge must bear a reasonable relationship to the merchant’s cost of accepting MasterCard cards.
MasterCard is opposed to excessive surcharging and will take the necessary steps to prevent it, both because it is anti-consumer and because merchants receive substantial benefits from accepting MasterCard cards that in most cases far exceed the cost of acceptance. These benefits include guaranteed and near immediate payment, the avoidance of cash handling, transport and pilferage costs, and incremental sales.
It is well known that most consumers resent being surcharged and for this reason it has been banned in a number of countries. Moreover, by discouraging the use of electronic payments and forcing consumers to carry more cash, surcharging may aggravate societal problems such as crime and tax avoidance.
Surcharging also implies that card purchases cost substantially more than cash transactions. They don't. Studies from all over the world have measured the retailer's cost of accepting cash at more than 2% of the transaction value, which is comparable to the retailer's cost for card transactions in most cases. And when one adds the societal costs of cash, card transactions are actually cheaper than cash.
Of course, cardholders have the option of giving their business only to merchants who do not apply a surcharge to card transactions. Where the surcharge is excessive, we would also encourage them to contact their bank, or MasterCard directly at email@example.com.
About MasterCard Worldwide
MasterCard Worldwide advances global commerce by providing a critical economic link among financial institutions, businesses, cardholders and merchants worldwide. As a franchisor, processor and advisor, MasterCard develops and markets payment solutions, processes approximately 21 billion transactions each year, and provides industry-leading analysis and consulting services to financial-institution customers and merchants. Powered by the MasterCard Worldwide Network and through its family of brands, including MasterCard®
, MasterCard serves consumers and businesses in more than 210 countries and territories. For more information go to www.mastercard.com