Latest news with #RichardCorney
RNZ News
19 hours ago
- Business
- RNZ News
Should Eftpos and cash-users get a discount?
The government plans to ban surcharges on card payments in-store, saving shoppers from being stung with surprise fees when paying with contactless technology. Photo: RNZ / Leonard Powell Don't expect a discount if you're paying with Eftpos or cash when the new contactless surcharge ban takes effect - but businesses are being put on notice that they shouldn't need to raise prices by more than 1 percent. It was announced on Monday that legislation would be introduced to Parliament to ban surcharges for in-store credit card transactions by the end of the year . Café and roastery owner Richard Corney said it would prompt him to put up prices because he could not absorb the cost himself. He said he paid $12,000 in merchant fees in 2023. Retail NZ chief executive Carolyn Young said the cost to businesses could be significant and all customers would end up bearing it, rather than simply those using contactless cards. "If businesses have to increase their prices to take into account those that pay by contactless and you pay by cash or Eftpos, you're still swiped." She said it was unlikely that retail businesses would offer discounts to those using other payment methods. Recommended retail prices were set at a level that took into account all the business's costs, she said. Small businesses had limited power to negotiate on the card fees they were charged, she said, and they had to be able to accept the payment methods to be able to do business. Corney said he would not offer discounts to those using cash or Eftpos. "Given the government is removing a cost recovery mechanism for merchant fees in general, there's still a net cost to businesses like ours, despite the regulated interchange fees." Infometrics chief forecaster Gareth Kiernan said cash transactions were not free for businesses, either. "I imagine in today's world where very few people pay in cash, the implicit cost associated with the hassle of needing to have appropriate change, finding time to taking money to the bank is reasonably high as a proportion of each transaction. For a small business, that cost is probably not properly accounted for, and might even be zero in accounting terms because the owner is effectively doing it in their own time. "The subsidisation by Eftpos transactions is probably more clear-cut, because there is a reasonably obvious gap in the charges for credit/PayWave transactions vs debit/Eftpos, with little or no difference in the associated work for the business receiving payment. I'd expect to see some more retailers reverting to not accepting credit cards, assessing that the possible inconvenience for their customers is outweighed by the cost savings for their business." But how much can prices reasonably rise? Commerce and Consumer Affairs Minister Scott Simpson said the change would take effect after interchange fees were capped, so they should not be as high as they have been. Consumer NZ spokesperson Jessica Walker said the fee reduction that was expected from late November should reduce the cost to business significantly. "Our stance is that those costs are going to be lower so even if businesses decide to increase prices because of the surcharge ban, that increase should be about 1 percent." She said that was preferable to some of the complaints Consumer received, which reported surcharges up to 25 percent. "The current situation is a mess, it's not working." She said a change in 2022 when the Retail Payment Systems Act took effect was meant to save money but those savings had not been experienced by shoppers. "The decision to ban surcharges should mean there is more money in shoppers' back pockets. Without a ban, there's no guarantee the savings will be passed on." But Young said it was likely that the surcharge ban would prompt more people to move to contactless payments, which would increase the costs overall, even if each charge was smaller. "It would have been great for the minister to let the Commerce Commission go through a proper consultation process." She said a range of surcharges were being charged at present but it would have been useful to allow the interchange caps to take effect and see what the effect was. "The Commerce Commission was going to run a consultation around surcharges," he said. Young said she had expected that could lead to new limits. Walker said open banking should also help to reduce the cost of payments.
RNZ News
2 days ago
- Business
- RNZ News
Ban on card payment surcharges: Cafe owner says they'll have to pass on cost
The government plans to ban surcharges on card payments for in-person payments. Photo: 123rf Prices may need to rise at restaurants and cafes due to a ban on credit card surcharges, the sector is warning. The government plans to ban surcharges on card payments for in-person payments. Legislation is expected to be introduced to Parliament by the end of the year, with the ban to kick into effect no later than May 2026. Richard Corney, founder of Flight Coffee and The Hangar cafe, said he would have to pass the cost on to consumers somehow. "Our cafe, The Hangar, paid $17,000 in merchant fees in 2023 for the privilege of using PayWave and other associated services," Corney said. "Yes, it speeds up service and there's value using it, but the solution isn't banning vendors from on charging this expense. What next? They ban cafes from charging a surcharge for opening on a public holiday? Better yet, and while they're putting restrictions on the banks, why not ban the banks from charging for this service outright and save small businesses real money by not having to fund this expense." He said cafes would operate on profit to revenue ratios of less than five percent. "Banks do not - and they're also institutionally paramount functions of our society," Corney said. He said $17,000 was a significant portion of after-tax profit "I absolutely have to on-charge any associated expense with regard to this." The policy seemed out of touch, he said. Restaurant Association chief executive Marisa Bidois agreed it would be tough on hospitality businesses operating on tight margins. "These surcharges are genuine costs that businesses must pay. Without surcharges, businesses will need to absorb these fees, further impacting already small margins." She said the announcement had come as a surprise. "We've actively engaged with the Government to outline the financial pressures faced by hospitality businesses due to bank-imposed fees," Bidois said. "While we welcome consumer-focused changes, we are concerned about the lack of consultation on this particular announcement." She said businesses would probably need to adjust their pries. "Removing the ability to surcharge could mean businesses factoring these costs into their overall pricing, potentially leading to increased costs for diners." Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
Scoop
26-06-2025
- Business
- Scoop
Are Coffee Prices Heading Down? Don't Hold Your Breath
Global coffee prices might have fallen but there's a warning that it might not mean you pay any less in your local cafe. RaboResearch data shows arabica coffee prices dropped 17 percent in the last three months and robusta, often used to make instant coffee, dropped 30 percent. It said this was due to improved production forecasts and diminishing demand. Global coffee demand is expected to drop 0.5 percent in 2025. A surplus of 1.4 million bags is projected for the 2025/26 year, primarily in arabicas. RaboResearch then also forecasts a much bigger surplus the following year, particularly if Brazilian weather is normal. Infometrics chief executive Brad Olsen said the price declines were encouraging but did not necessarily mean New Zealanders would see coffee prices fall. "Given the full increase in global coffee prices hasn't fully hit Kiwis' morning caffeine hit yet there might not be real relief for New Zealand coffee prices." He said while World Bank data showed arabica coffee prices were down 3.1 percent in May from the peak in February they were still 2.3 times the May 2019 price. Robusta was down 9.8 percent from the peak but the same margin up on 2019. "Stats NZ data shows that instant coffee prices in May 2025 were 14 percent higher than a year ago, and only 36 percent higher than in 2019 - so less than a tenth of global coffee price pressure has hit directly. With not as much of the original hit from coffee prices hitting local prices, we might not see a lot of relief. If anything, forward ordering of coffee means we might still see further price increases trickle through as beans are imported after being ordered before recent price falls. "Café operators have clearly been trying to absorb as much of coffee price rises as they can to limit how many people might stop buying at higher prices. Stats NZ data also shows takeaway coffee prices are up just 3.8 percent per year in May, despite the large increases in both coffee and dairy prices, suggesting cafes are taking the hit on their margins rather than pass price increases on as much." Café and roastery owner Richard Corney, of Flight Coffee and The Hangar, has been warning that retail coffee prices are unsustainably low. He said if prices had kept up with the increase in café costs in recent years, a flat white would be selling for $7.
