Find out what interchange is and the value it delivers
The benefits that interchange delivers to all parties
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Consumers derive significant value from electronic payments including convenience and safety when they make a purchase, increased opportunity for financial inclusion, access to rewards or incentives and the choice of thousands of debit, credit and prepaid payment products.
Merchants benefit from guaranteed payment; increased sales; fraud protection; lower processing costs than those associated with other forms of payment such as checks and cash; and the ability to attract and retain customers with a fast, efficient buying experience.
Interchange helps card Issuers cover the eligible costs they incur, including processing and authorisation, fraud and fraud protection, and it funds new payment technologies. For example, interchange funds innovations in payment technologies like Tap and go™, which better facilitate transactions and improve customer service.
Governments experience significant efficiencies and promote financial inclusion for their citizens when they choose to distribute social benefits and other programs via electronic payments.
Electronic payments are often the point of entry for new consumers to a formal financial ecosystem. By incentivising issuers to create innovative payment programs, interchange helps encourage financial inclusion for consumers who could not otherwise participate.
|New Zealand Weighted Average Interchange (per cent)||Jan - Jun 2016||Jul - Dec 2016||Jan - Jun 2017||Jul - Dec 2017|
|Credit - Card Present||1.288||1.266||1.250||1.275|
|Credit - Card Not Present||1.310||1.319||1.292||1.305|
|Debit - Card Present||0.319||0.299||0.283||0.278|
|Debit - Card Not Present||0.857||0.854||0.853||0.855|
What these numbers represent.
The numbers above represent the average interchange fee for domestic transactions in New Zealand – that is, a card issued by a New Zealand bank, used at a shop or business in New Zealand.
Interchange is a small fee which is paid between banks to support the card payment system. These fees reflect the value businesses in New Zealand receive from accepting Mastercard products. They play a key role in balancing the costs consumers and merchants pay.
Here in NZ, interchange is collected from a business’s bank (known as acquirer) and paid to the cardholder’s bank (known as issuer) to reimburse issuers for a portion of the costs they incur in providing services that benefit all participants in the system. That includes acquirers and businesses, whose participation in the network enables increased sales, efficiencies in the delivery of products, guaranteed payments and improved customer experience.
We set interchange fees that apply when there are no other established settlement terms in place between an issuer and an acquirer. While Mastercard administers the collection and remittance of interchange fees through our settlement process, we do not earn revenue from them.
Credit – Card Present
A transaction on a credit card (which would typically see the transaction value attributed to an account with a revolving credit facility) where the cardholder, card and terminal are all present at the time of the transaction.
Credit – Card not Present
A transaction on a credit card (which would typically see the transaction value attributed to an account with a revolving credit facility) where the card cannot be viewed by a business. Usually, these are transactions done on the internet (online or on mobile), in app, over the phone or where a business stores a cardholder’s details, for example a transport app.
Debit – Card Present
A transaction on a debit card (which would typically see funds taken from the cardholder’s deposit account immediately) where the cardholder, card and terminal are all present at the time of the transaction.
Debit – Card Not Present
A transaction on a debit card (which would typically see funds taken from the cardholder’s deposit account immediately) where the card cannot be seen by a business. Usually, these are transactions done on the internet (online or on mobile), in app, over the phone or where a business stores a cardholder’s details, for example a transport app.
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.
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.