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 September 1, 2015 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.

 

ANZ Bank New Zealand Limited

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.

New Zealand Intracountry Credit POS Interchange Rates

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%
Contactless (excluding commercial cards) 5 0.50%
Government & Utilities 6 0.70%
Petroleum 7 0.60%
Education & Learning 8 0.80%
Recurring Payments 9 0.70%
SecureCode Merchant UCAF 10 1.00%
SecureCode Full UCAF 11 1.20%
Consumer Elite 12 2.35%
Consumer Super Premium 1 13 2.35%
Consumer Super Premium 2 14 2.10%
Consumer Premium 15 2.15%
Commercial Premium 16 2.20%
Commercial 17 2.00%
Consumer Electronic 18 1.00%
Consumer Standard 19 1.40%
 

 

Qualifying Criteria for New Zealand Intracountry Credit Interchange Rate Programs

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.
Contactless Available for all Contactless tapped transactions equal to or less than NZ$80, other than for Charities, Strategic Merchants and Commercial Cards.
Government and Utilities Available to the following MCCs: 9211, 9222, 9223, 9311, 9399, 9402, 9405, 4812, 4813, 4814, 4816, 4821, 4899, and 4900.
Petroleum Available to the following MCCs: 5541, 5542
Education and Learning Available to the following MCCs: 8211, 8220, 8241, 8244, 8249, 8299, 8351.
Recurring Payments Available for transactions containing the Recurring Payment indicator except for transactions that would qualify for Charities, Strategic Merchants, Contactless, Government, Utilities & Insurance, Petroleum, and Education & Learning.
SecureCode Merchant UCAF Applies to electronic commerce (e-commerce) credit card transactions with Merchant Universal Cardholder Authentication Field™ (UCAF) only except for Charities, Strategic Merchants, Contactless, Government and Utilities, Petroleum, Education and Learning and Recurring Payments.
SecureCode Full UCAF Applies to e-commerce credit card transactions with Full UCAF except Charities, Strategic Merchants, Contactless, Government and Utilities, Petroleum, Education and Learning, and Recurring Payments.
Consumer Elite Available for all Mastercard World Elite® card transactions, other than for Charities, Strategic Merchants, Contactless, Government and Utilities, Education and Learning, Petroleum, Recurring Payments , Contactless, SecureCode Merchant UCAF, andSecureCode Full UCAF.
Consumer Super Premium 1 Available for all MasterCard World® and Mastercard World Elite®consumer credit card transactions, other than for Charities, Strategic Merchants, Contactless, Government and Utilities, Education and Learning, Petroleum, Recurring Payments, SecureCode Merchant UCAF, and SecureCode Full UCAF.
Consumer Super Premium 2 Available for all Mastercard Titanium consumer credit card transactions, other than for Charities, Strategic Merchants, Contactless, Government and Utilities, Education and Learning, Petroleum, Recurring Payments, SecureCode Merchant UCAF, SecureCode Full UCAF, and Consumer Super Premium 1.
Consumer Premium Available for all Platinum consumer credit card transactions, other than for Charities, Strategic Merchants, Contactless, Government and Utilities, Education and Learning, Petroleum, Recurring Payments, SecureCode Merchant UCAF, and SecureCode Full UCAF.
Commercial Premium Available for all commercial premium (platinum and above) credit card transactions, other than for Charities, Strategic Merchants, Contactless, Government and Utilities, Education and Learning, Petroleum, Recurring Payments, SecureCode Merchant UCAF, andSecureCode Full UCAF.
Commercial Available for all non-premium commercial credit card transactions, other than for Charities, Strategic Merchants, Contactless, Government and& Utilities, Education and Learning, Petroleum, Recurring Payments, SecureCode Merchant UCAF, and SecureCode Full UCAF.
Consumer Electronic Available for all consumer credit card transactions (excluding consumer premium and super premium) conducted at an electronic data capture terminal and authorized by the issuer other than for Charities, Strategic Merchants, Contactless, Government and Utilities, Education and Learning, Petroleum, Recurring Payments.
Consumer Standard Available to all domestic consumer credit card transactions not qualifying for any other interchange category.

 

New Zealand Intracountry Debit POS Interchange Rates

Interchange Category Name Priority Rate
Charities 1 0.00%
Contactless Micropayment (<=$15) 2 NZD 0.004
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%
Contactless 8 0.40%
Government & Utilities  9 0.50%
Petroleum 10 0.50%
Recurring Payments 11 0.70%
SecureCode Merchant UCAF 12 1.00%
SecureCode Merchant Full UCAF 13 1.20%
Consumer Premium - Debit 14 1.30%
Commercial - Debit 15 1.50%
Consumer Electronic - Debit 16 0.50%
Consumer Standard - Debit 17 1.30%

 

Qualifying Criteria for New Zealand Intracountry Debit Interchange Rate Programs

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 Micropayments Available for all Contactless prepaid and debit tapped transactions equal to or less than NZ$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.
Contactless Available for all Contactless prepaid and debit tapped transactions over NZD15 other than for Charities and Strategic Merchants.
Government and Utilities Available for all Debit Mastercard and prepaid Mastercard transactions at the following MCCs: 9211, 9222, 9223, 9311, 9399, 9402, 9405, 4812, 4813, 4814, 4816, 4821, 4899, and 4900.
Petroleum Available for all Debit Mastercard and prepaid Mastercard transactions at the following MCCs: 5541 and 5542.
Recurring Payments Available for all Debit Mastercard and prepaid Mastercard transactions containing the Recurring Payment indicator other than transactions qualifying for Charities, Strategic Merchants, Contactless, Government and Utilities, and Petroleum.
SecureCodeMerchant UCAF Applicable to e-commerce debit and prepaid card transactions with Merchant UCAF only except for Charities, Contactless Micropayments, Strategic Merchants, Government & Utilities, Petroleum and Recurring Payments.
SecureCodeFull UCAF Applicable to e-commerce debit and prepaid card transactions with Full UCAF except Charities, Contactless Micropayments, Strategic Merchants, Government & Utilities, Petroleum, and Recurring Payments.
Consumer Premium- Debit Available for all consumer premium debit card transactions, other than for Charities, Contactless Micropayments, Strategic Merchants, Contactless, Government and Utilities, Education and Learning, Petroleum, Recurring Payments, SecureCode Merchant UCAF, and SecureCode Full UCAF.
Commercial Debit Available for all commercial debit transactions, other than for Charities, Contactless Micropayments, Strategic Merchants, Contactless, Government & Utilities, Petroleum, and Recurring Payments.
Consumer Electronic - Debit Available for all consumer debit transactions conducted at an electronic data capture terminal and authorised by the issuer other than other than for Charities, Contactless Micropayments, Strategic Merchants, Contactless, Government & Utilities, Petroleum and Recurring Payments.
Consumer Standard - Debit Available to all domestic consumer debit transactions not qualifying for any other interchange category.

 

New Zealand Intracountry Prepaid POS Interchange Rates

Interchange Category Name Priority Rate
Charities 1 0.00%
Contactless Micropayment (<=$15) 2 NZD 0.004
Strategic Merchants 1 3 0.40%
Strategic Merchants 2 4 0.40%
Strategic Merchants 3 5 0.40%
Contactless 6 0.40%
Government & Utilities 7 0.50%
Petroleum 8 0.50%
Recurring Payments 9 0.70%
SecureCode Merchant UCAF 10 1.00%
SecureCode Full UCAF 11 1.20%
Consumer Premium - Prepaid 12 1.30%
Commercial - Prepaid 13 1.50%
Consumer Electronic - Prepaid 14 0.50%
Consumer Standard - Prepaid 15 1.30%

 

Qualifying Criteria for New Zealand Intracountry Prepaid Interchange Rate Programs

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 Micropayments 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.
Contactless Available for all Contactless prepaid and debit tapped transactions over NZD 15 other than for Charities and Strategic Merchants.
Government and Utilities Available for all Debit Mastercard and prepaid Mastercard transactions at the following MCCs: 9211, 9222, 9223, 9311, 9399, 9402, 9405, 4812, 4813, 4814, 4816, 4821, 4899, and 4900.
Petroleum Available for all Debit Mastercard and prepaid Mastercard transactions at the following MCCs: 5541 and 5542.
Recurring Payments Available for all Debit Mastercard and prepaid Mastercard transactions containing the Recurring Payment indicator other than transactions qualifying for Charities, Strategic Merchants, Contactless, Government and Utilities, and Petroleum.
SecureCode Merchant UCAF Applicable to e-commerce debit and prepaid card transactions with Merchant UCAF only except for Charities, Contactless Micropayments, Strategic Merchants, Government and Utilities, Petroleum, and Recurring Payments.
SecureCode Full UCAF Applicable to e-commerce debit and prepaid card transactions with Full UCAF except Charities, Contactless Micropayments, Strategic Merchants, Government and Utilities, Petroleum, and Recurring Payments.
Consumer Premium- Prepaid Available for all consumer premium prepaid card transactions, other than for Charities, Contactless Micropayments, Strategic Merchants, Contactless, Government and Utilities, Education and Learning, Petroleum, Recurring Payments, SecureCode Merchant UCAF, and SecureCode Full UCAF..
Commercial Prepaid Available for all commercial prepaid transactions, other than for Charities, Contactless Micropayments, Strategic Merchants, Contactless, Government and Utilities, Petroleum, and Recurring Payments.
Consumer Electronic- Prepaid Available for all consumer prepaid transactions conducted at an electronic data capture terminal and authorized by the issuer other than other than for Charities, Contactless Micropayments, Strategic Merchants, Contactless, Government and Utilities, Petroleum, and Recurring Payments.
Consumer Standard- Prepaid Available to all domestic consumer prepaid transactions not qualifying for any other interchange category.