New Zealand had been on my bucket list for a long time, and this autumn the time had come. My first intercontinental flight after a 3.5-year break due to coronavirus – and then directly for a slender 28 hours.

And I have to say: it was well worth it. All my hopes were met and exceeded in terms of scenery, human interaction and entertainment value. Even the cost of living was surprisingly favourable.

Accommodation, car hire, bar and restaurant visits – I had expected US or Scandinavian price levels for all of these things and found myself paying considerably less. The fact that you can pay by card everywhere goes without saying; hence I was outside Germany.

However, there was one thing that caught the eye of the payment nerd:

The issue of payment costs

Transaction fees were a constant companion – and that doesn’t even refer to the foreign exchange fees on the credit card statement. At first, I thought the New Zealand dialect was just playing tricks on me:

2% Sir Charles fees?

Is the Commonwealth now required to contribute to the cost of this year’s coronation ceremony? Truth be told, it would be no less adventurous than the explanation for some of the Card Scheme Fees that have been imposed over the years. However, it quickly turned out to be a phonetic error.

Surcharge instead of Sir Charles

No British royal demanded an additional contribution, but instead transaction fees were passed on to me as the end customer in a wide variety of constellations. Or, to put it in seasonal terms: surcharging fees – the spirit of Christmas past.

What has been banned for card payments in the EU since 2018 as part of PSD2 is still being used in a wide variety of forms and colours in New Zealand. Surcharging wherever you look. At first glance, the criteria used to determine transaction fees are seemingly arbitrary.

While some merchants do not pass on fees at all, others charge additional costs for the use of contactless functionality, the use of Amex or the use of credit cards in general. Viewed through the lens of the EU, the fees charged are occasionally quite ambitious and range between 1-5% of the transaction amount.

Cheers to regulation?

As an attentive market observer, I was fascinated by the whole affair, but as a consumer, I was rather disillusioned or even annoyed. However often the regulatory attempts from Brussels may have overshot the mark (remember the inglorious Cucumber Regulation),we should also emphasize when real added value has been created for the customer. Concealed costs for card payments added to the purchase value are a thing of the past.

As a customer, I can say: I’m happy about that. At the same time, it cannot be denied that payment costs still exist and therefore have to be included in the retailer’s price calculation.

How do you feel about this? Does the customer benefit of the surcharging ban outweigh this, or has there been too much interference with the pricing of PSPs and retailers?

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