Understanding Interchange

Find out what interchange is and the value it delivers

What is interchange?

Interchange is a small fee paid by a merchant's bank (acquirer) to a cardholder's bank (issuer) to compensate the issuer for the value and benefits that merchants receive when they accept electronic payments.

Interchange helps maximise the value delivered to all stakeholders

 

New Zealand Businesses 

Business benefits in many ways as a result of interchange including reducing the significant costs associated with counting, safeguarding and transporting cash and limiting the losses that occur when cash received is lost or stolen. Merchants who accept cards also receive the most important commercial benefit:  they increase sales. Studies show that consumers spend more when they use cards and merchants make more money when they accept cards. Interchange also provides convenience, security and fraud prevention and supports the use of credit cards. For example, payment is guaranteed to the business when a good is sold but the cardholder does not pay their credit card bill.                                                                                                                                                 

  • Debit and credit transactions are about 2 to 6 times larger than cash purchases respectively 
  • When compared to acceptance of cash, the additional value provided  to merchants by electronic payments  is about 2 to 3 times the total cost of acceptance

Retailers, in particular, have seen the value of interchange through increased speed at the point of sale, leveraging ‘tap and go’ or contactless transactions, reducing fraud, the cost of handling cash, and reducing the amount of cash held in stores (making stores safer for team members).  

Governments

Electronic payments facilitate economic activity and provide the necessary infrastructure for citizens and businesses to interact in a financial ecosystem. Government and the public sector are major beneficiaries of interchange as they utilise many different payment options including commercial cards. For example, electronic payments have revolutionised welfare payments systems

Electronic payments help safeguard against waste, fraud and abuse

  • Using electronic payments to deliver social benefits is more efficient and secure
  • Black and grey economies fueled by untraceable and untaxable cash payments flourish where electronic payments use is low

Consumers

Interchange delivers major benefits to consumers. Not only does it allow businesses to accept their cards, it contributes to the cost of fraud prevention and pays for the interest free days on credit cards. For example, in the event of a stolen card, Mastercard cardholders are protected from fraud or unauthorised transactions under Mastercard’s Zero Liability Policy (For more information click here) Convenience and safety, increased opportunity for financial inclusion, access to rewards and incentives and the choice of thousands of innovative credit, debit and prepaid payment products are among the many benefits consumers derive from electronic payments. 

  • Payments allow consumers to access money whenever and wherever they want
  • Interchange makes it possible for issuers to provide consumers with interest-free periods on credit cards
  • Electronic payments provide consumers with a more secure and efficient way to pay - whether in-person, online or in-app

Our role 

Mastercard does not earn revenue from interchange.

Mastercard sets interchange rates based on the value delivered by the issuing bank as well as the benefits of accepting electronic payments. Setting interchange at the right level is important because if interchange rates are set too high, merchants may choose not to accept cards; and, if interchange is set too low, issuing banks have no incentive to cover the risks of issuing payment cards.

This also helps ensure that both issuers and acquirers deliver services that optimise the effectiveness of the payments system and spur development of innovative payment solutions. 

Flexible interchange rates make it possible for electronic payments to deliver maximum value at the lowest cost for both merchants and consumers. Interchange also promotes credit availability for small businesses and is a key driver for financial inclusion when set at the optimal level.

Effective May 1, 2019 the maximum interchange fees to be applied to Mastercard purchase transactions in New Zealand where the card issuer and merchant acquirer are both New Zealand residents will be as follows.

All issuers of Mastercard cards in New Zealand have notified Mastercard that they wish for the Mastercard maximum rate to be applied to all transactions. For further information relating to each issuer’s interchange fees please click below.

 

ASB Bank

BNZ

KiwiBank

The Warehouse Rewards Mastercard

The Warehouse Low-Interest Mastercard

Westpac


Mastercard reserves the right to change these fees as it deems appropriate from time to time. Any such changes to these fees will be published on this site as required by the Standard.

Enquiries regarding interchange fees should be directed to Mastercard Worldwide at +64 9377 5026.

Mastercard Credit Card Transactions

Interchange Category Name Priority Rate
Charities 1 0.00%
Strategic Merchants 1 2 0.50%
Strategic Merchants 2 3 0.60%
Strategic Merchants 3 4 0.70%
Strategic Merchants 4 5 1.10%
Strategic Merchants 5 6 1.50%
Tokenized Contactless 7 0.50%
Contactless (excluding commercial cards) 8 0.50%
Government & Utilities 9 0.70%
Petroleum 10 0.60%
Education and Learning 11 0.80%
Recurring Payments - Tokenized 12 0.80%
Recurring Payments - Others 12 1.10%
Commercial Premium 13 2.20%
Commercial 14 2.10%
Tokenized Online 15 1.40%
Consumer Elite - Card Present 16 2.00%
Consumer Elite - Card Not Present 17 2.25%
Consumer Super Premium 1 - Card Present 18 2.00%
Consumer Super Premium 1 - Card Not Present 19 2.25%
Consumer Super Premium 2 - Card Present 20 1.85%
Consumer Super Premium 2 - Card Not Present 21 2.15%
Consumer Premium - Card Present 22 1.85%
Consumer Premium - Card Not Present 23 2.10%
Consumer Standard - Card Present 24 0.85%
Consumer Standard - Card Not Present 25 1.65%

 

Mastercard Credit Interchange Qualification Criteria

Interchange Category Description
Charities Available to merchants set up with MCC 8398 that are recognized by the New Zealand Inland Revenue Department as charitable organisations and only for donations/payments that may be claimed as a tax deduction.
Strategic Merchants 1 Available to merchants and or merchant groups (as advised by Mastercard from time to time), which meet agreed performance requirements.
Strategic Merchants 2 Available to merchants and or merchant groups (as advised by Mastercard from time to time), which meet agreed performance requirements.
Strategic Merchants 3 Available to merchants and or merchant groups (as advised by Mastercard from time to time), which meet agreed performance requirements.
Strategic Merchants 4 Available to merchants and or merchant groups (as advised by Mastercard from time to time), which meet agreed performance requirements.
Strategic Merchants 5 Available to merchants and or merchant groups (as advised by Mastercard from time to time), which meet agreed performance requirements.
Tokenized Contactless Available for Tokenized Contactless transactions, other than transactions that would qualify for Charities and/or Strategic Merchants. Tokenized Contactless transactions must be correctly identified using the wallet identifier in the authorization and clearing messages.
Contactless Available for all Contactless tapped transactions equal to or less than NZ$80, other than for Charities, Strategic Merchants and Commercial Cards.
Government & Utilities Available to the following MCCs: 9211, 9222, 9223, 9311, 9399, 9402, 9405, 4812, 4813, 4814, 4816, 4821, 4899, and 4900 other than transactions that would qualify for Charities, Strategic Merchants, Tokenized Contactless, and Contactless.
Petroleum Available to the following MCCs: 5541, 5542 other than transactions that would qualify for Charities, Strategic Merchants, Tokenized Contactless, Contactless, and Government and Utilities.
Education and Learning Available to the following MCCs: 8211, 8220, 8241, 8244, 8249, 8299, and 8351 other than transactions that would qualify for Charities, Strategic Merchants, Tokenized Contactless, Contactless, Government and Utilities, and Petroleum.
Recurring Payments - Tokenized Available for transactions containing the Recurring Payment Indicator other than transactions that would qualify for Charities, Strategic Merchants, Government and Utilities, Petroleum, and Education and Learning. Recurring Payment—tokenized transactions must be correctly identified using the wallet identifier in the authorization and clearing messages in addition to the Recurring Payment Indicator.
Recurring Payments - Others Available for transactions containing the Recurring Payment Indicator other than transactions that would qualify for Charities, Strategic Merchants, Government, Utilities and Insurance, Petroleum, Education and Learning, and Recurring Payments—Tokenized.
Commercial Premium Available for all commercial premium credit card transactions, other than for Charities, Strategic Merchants, Tokenized Contactless, Contactless, Government and Utilities, Education and Learning, Petroleum, and Recurring Payments.
Commercial Available for all non-premium commercial credit card transactions, other than for Charities, Strategic Merchants, Tokenized Contactless, Contactless, Government and Utilities, Education and Learning, Petroleum, and Recurring Payments.
Tokenized Online Available for Tokenized Online transactions, other than transactions that would qualify for Charities, Strategic Merchants, Tokenized Contactless, Contactless, Government and Utilities, Education and Learning, Petroleum, Recurring Payments, Commercial Premium, and Commercial. Tokenized Online transactions must be correctly identified using the wallet identifier in the authorization and clearing messages.
Consumer Elite – Card Present Available for all card-present transactions on Mastercard World Elite® card transactions, other than Charities, Strategic Merchants, Tokenized Contactless, Contactless, Government, Utilities and Insurance, Petroleum, and Education and Learning.
Consumer Elite – Card Not Present Available for all card-not-present transactions on Mastercard World Elite® card transactions, other than Charities, Strategic Merchants, Government, Utilities and Insurance, Petroleum, Education and Learning, Recurring Payments, and Tokenized Online.
Consumer Super Premium 1 – Card Present Available for all card-present transactions on Mastercard World® card transactions, other than Charities, Strategic Merchants, Tokenized Contactless, contactless, Government, Utilities and Insurance, Petroleum, and Education and Learning.
Consumer Super Premium 1 - Card Not Present Available for all card-not-present transactions on Mastercard World® card transactions, other than Charities, Strategic Merchants, Government and Utilities, Petroleum, Education and Learning, Recurring Payments, and Tokenized Online.
Consumer Super Premium 2 – Card Present Available for all card-present transactions on Mastercard Titanium consumer card transactions, other than for Charities, Strategic Merchants, Tokenized Contactless, Contactless, Government and Utilities, Education and Learning, Petroleum, and Consumer Super Premium 1.
Consumer Super Premium 2 - Card-Not-Present Available for all card-not-present transactions on Mastercard Titanium consumer card transactions, other than for Charities, Strategic Merchants, Government and Utilities, Education and Learning, Petroleum, Recurring Payments, Tokenized Online, and Consumer Super Premium 1.
Consumer Premium - Card-Present Available for all card-present Platinum consumer credit card transactions, other than for Charities, Strategic Merchants, Tokenized Contactless, Contactless, Government and Utilities, Education and Learning, and Petroleum.
Consumer Premium – Card Not Present Available for all card-not-present transactions on Platinum consumer credit card, other than for Charities, Strategic Merchants, Contactless, Government and Utilities, Education and Learning, Petroleum, Recurring Payments, and Tokenized Online.
Consumer Standard – Card Present Available for all card-present consumer credit card transactions (excluding Consumer Premium, Super Premium, and Elite), other than Charities, Strategic Merchants, Tokenized Contactless, Contactless, Government and Utilities, Education and Learning, and Petroleum.
Consumer Standard – Card Not Present Available for all card-present consumer credit card transactions (excluding Consumer Premium, Super Premium, and Elite), other than for Charities, Strategic Merchants, Contactless, Government and Utilities, Education and Learning, Petroleum, Recurring Payments, and Tokenized Online.

 

Mastercard Debit Card Interchange Fee Qualifying Criteria

Interchange Category Name Priority Rate
Charities 1 0.00%
Contactless Micropayment (<=$15) 2 0.20%
Contactless Strategic Merchants 1 3 NZD 0.06
Contactless Strategic Merchants 2 4 NZD 0.10
Strategic Merchants 1 5 0.30%
Strategic Merchants 2 6 0.35%
Strategic Merchants 3 7 0.40%
Strategic Merchants 4 8 0.90%
Strategic Merchants 5 9 1.10%
Tokenized Contactless 10 0.20%
Commercial 11 1.50%
Contactless 12 0.20%
Consumer - Card Present 13 0.15%
Government & Utilities 14 0.50%
Petroleum 15 0.50%
Recurring Payments - Tokenized 16 0.60%
Recurring Payments - Others 16 0.90%
Tokenized Online 17 1.00%
Consumer Premium - Card Present 18 1.20%
Consumer Premium - Card Not Present 19 1.50%
Consumer - Card Not Present 20 1.25%

 

Mastercard Debit Interchange Qualification Criteria

Interchange Category Description
Charities Available for all Debit Mastercard and prepaid Mastercard transactions at merchants set up with MCC 8398 that are recognized by the New Zealand Inland Revenue Department as charitable organizations and only for donations/payments that may be claimed as a tax deduction.
Contactless Micropayment (<=$15)  Available for all contactless prepaid and debit tapped transactions equal to or less than NZD 15 other than transactions qualifying for Charities.
Contactless Strategic Merchants 1 Available to Strategic Merchant 1 merchants for all Contactless debit tapped transactions over NZD$15 other than for Charities.
Contactless Strategic Merchants 2 Available to Strategic Merchant 2 merchants for all Contactless debit tapped transactions over NZ$15 other than for Charities.
Strategic Merchants 1 Available to merchants and or merchant groups (as advised by Mastercard from time to time), which meet Mastercard performance requirements.
Strategic Merchants 2 Available to merchants and or merchant groups (as advised by Mastercard from time to time), which meet Mastercard performance requirements.
Strategic Merchants 3 Available to merchants and or merchant groups (as advised by Mastercard from time to time), which meet Mastercard performance requirements.
Strategic Merchants 4 Available to merchants and or merchant groups (as advised by Mastercard from time to time), which meet Mastercard performance requirements.
Strategic Merchants 5 Available to merchants and or merchant groups (as advised by Mastercard from time to time), which meet Mastercard performance requirements.
Tokenized Contactless Available for Tokenized Contactless transactions, other than transactions that would qualify for Charities, Contactless Micropayment, Contactless Strategic Merchants and/or Strategic Merchants. Tokenized Contactless transactions must be correctly identified using the wallet identifier in the authorization and clearing messages.
Commercial Available for all non-premium commercial debit card transactions, other than for Charities, Contactless Micropayments, Contactless Strategic Merchants, Strategic Merchants, and Tokenized Contactless.
Contactless Available for all contactless tapped transactions, other than for Charities, Contactless Micropayments, Strategic Merchants, Tokenized Contactless and Commercial Cards
Consumer - Card Present Available for all card-present consumer debit card transactions (excluding consumer premium), other than Charities, Contactless Micropayments, Contactless Strategic Merchants, Strategic Merchants, Tokenized Contactless, and Contactless.
Government & Utilities Available to the following MCCs: 9211, 9222, 9223, 9311, 9399, 9402, 9405, 4812, 4813, 4814, 4816, 4821, 4899, and 4900 other than transactions that would qualify for Charities, Contactless Micropayments, Contactless Strategic Merchants, Strategic Merchants, Tokenized Contactless, Commercial, and Contactless.
Petroleum Available to the following MCCs: 5541, 5542 other than transactions that would qualify for Charities, Contactless Micropayments, Contactless Strategic Merchants, Strategic Merchants, Tokenized Contactless, Commercial, and Contactless.
Recurring Payments - Tokenized Available for transactions containing the Recurring Payment Indicator other than transactions that would qualify for Charities, Strategic Merchants, Commercial, Government and Utilities, Petroleum. Recurring Payment—Tokenized transactions must be correctly identified using the wallet identifier in the authorization and clearing messages in addition to the Recurring Payment Indicator.
Recurring Payments - Others Available for transactions containing the Recurring Payment Indicator other than transactions that would qualify for Charities, Strategic Merchants, Commercial, Government and Utilities, Petroleum, and Recurring Payments—Tokenized.
Tokenized Online Available for Tokenized Online transactions, other than transactions that would qualify for Charities, Strategic Merchants, Commercial, Government and Utilities, Petroleum, and Recurring Payments. Tokenized Online transactions must be correctly identified using the wallet identifier in the authorization and clearing messages.
Consumer Premium - Card Present Available for all card-present platinum consumer debit card transactions, other than transactions that would qualify for Charities, Contactless Micropayments, Contactless Strategic Merchants, Strategic Merchants, Tokenized Contactless, Commercial, Contactless, Government and Utilities, and Petroleum.
Consumer Premium - Card Not Present Available for all card-not-present transactions on Platinum consumer debit card, other than transactions that would qualify for Charities, Strategic Merchants, Commercial, Government and Utilities, Petroleum, Recurring Payments, and Tokenized Online.
Consumer - Card Not Present Available for all card-present consumer debit card transactions (excluding consumer premium), other than for Charities, Strategic Merchants, Contactless, Government and Utilities, Petroleum, Recurring Payments, and Tokenized Online

Mastercard Prepaid Card Transactions

Interchange Category Name Priority Rate
Charities 1 0.00%
Contactless Micropayment (<=$15) 2 0.20%
Strategic Merchants 1 3 0.40%
Strategic Merchants 2 4 0.40%
Strategic Merchants 3 5 0.40%
Strategic Merchants 4 6 0.90%
Strategic Merchants 5 7 1.10%
Tokenized Contactless 8 0.20%
Commercial 9 1.50%
Contactless 10 0.20%
Government & Utilities 11 0.50%
Petroleum 12 0.50%
Recurring Payments - Tokenized 13 0.70%
Recurring Payments - Others 13 0.70%
Tokenized Online 14 1.00%
Consumer Premium - Card Present 15 1.20%
Consumer Premium - Card Not Present 16 1.50%
Consumer - Card Present 17 0.50%
Consumer - Card Not Present 18 1.25%

 

Mastercard Prepaid Interchange Qualification Criteria

Interchange Category Description
Charities Available for all Debit Mastercard and prepaid Mastercard transactions at merchants set up with MCC 8398 that are recognized by the New Zealand Inland Revenue Department as charitable organizations and only for donations/payments that may be claimed as a tax deduction.
Contactless Micropayment (<=$15) Available for all Contactless prepaid and debit tapped transactions equal to or less than NZD 15 other than transactions qualifying for Charities.
Strategic Merchants 1 Available to merchants and or merchant groups (as advised by Mastercard from time to time), which meet Mastercard performance requirements.
Strategic Merchants 2 Available to merchants and or merchant groups (as advised by Mastercard from time to time), which meet Mastercard performance requirements.
Strategic Merchants 3 Available to merchants and or merchant groups (as advised by Mastercard from time to time), which meet Mastercard performance requirements.
Strategic Merchants 4 Available to merchants and or merchant groups (as advised by Mastercard from time to time), which meet Mastercard performance requirements.
Strategic Merchants 5 Available to merchants and or merchant groups (as advised by Mastercard from time to time), which meet Mastercard performance requirements.
Tokenized Contactless Available for Tokenized Contactless transactions, other than transactions that would qualify for Charities, Contactless Strategic Merchants and/or Strategic Merchants. Tokenized Contactless transactions must be correctly identified using the wallet identifier in the authorization and clearing messages.
Commercial Available for all non-premium commercial prepaid card transactions, other than for Charities, Contactless Micropayments, Strategic Merchants, and Tokenized Contactless.
Contactless Available for all contactless tapped transactions, other than for Charities, Contactless Micropayments, Strategic Merchants, Tokenized Contactless and Commercial Cards.
Government & Utilities Available to the following MCCs: 9211, 9222, 9223, 9311, 9399, 9402, 9405, 4812, 4813, 4814, 4816, 4821, 4899, and 4900 other than transactions that would qualify for Charities, Contactless Micropayments, Strategic Merchants, Tokenized Contactless, Commercial, and Contactless.
Petroleum Available to the following MCCs: 5541, 5542 other than transactions that would qualify for Charities, Contactless Micropayments, Strategic Merchants, Tokenized Contactless, Commercial, and Contactless.
Recurring Payments - Tokenized Available for transactions containing the Recurring Payment Indicator other than transactions that would qualify for Charities, Strategic Merchants, Commercial, Government and Utilities, Petroleum. Recurring Payment—Tokenized transactions must be correctly identified using the wallet identifier in the authorization and clearing messages in addition to the Recurring Payment Indicator.
Recurring Payments - Other Available for transactions containing the Recurring Payment Indicator other than transactions that would qualify for Charities, Strategic Merchants, Commercial, Government and Utilities, Petroleum, and Recurring Payments—Tokenized.
Tokenized Online Available for Tokenized Online transactions, other than transactions that would qualify for Charities, Strategic Merchants, Commercial, Government and Utilities, Petroleum, and Recurring Payments. Tokenized Online transactions must be correctly identified using the wallet identifier in the authorization and clearing messages.
Consumer Premium - Card Present Available for all card-present Platinum consumer prepaid card transactions, other than transactions that would qualify for Charities, Contactless Micropayments, Contactless Strategic Merchants, Strategic Merchants, Tokenized Contactless, Commercial, Contactless, Government and Utilities, and Petroleum.
Consumer Premium - Card Not Present Available for all card-not-present transactions on Platinum consumer prepaid card, other than transactions that would qualify for Charities, Strategic Merchants, Commercial, Government and Utilities, Petroleum, Recurring Payments, and Tokenized Online.
Consumer - Card Present Available for all card-present consumer prepaid card transactions (excluding Consumer Premium), other than Charities, Contactless Micropayments, Contactless, Strategic Merchants, Strategic Merchants, Tokenized Contactless, Contactless, Government and Utilities, and Petroleum
Consumer - Card Present Available for all card-present consumer prepaid card transactions (excluding Consumer Premium), other than for Charities, Strategic Merchants, Contactless, Government and Utilities, Petroleum, Recurring Payments, and Tokenized Online.