A Wellington ice-cream chain is among businesses no longer offering contactless payment to customers because of the cost.
Kaffee Eis Managing Director Karl Tiefenbacher says the company has stopped offering Paywave and Tap & Go after being charged an additional $20,000 in fees over the past 16 months.
"I called the bank to see if they could do anything about it because obviously that amount is ridiculous – turns out it was the lowest amount they would charge a retailer.
"The extra costs, they really eat into the bottom line," he told 1 NEWS.
The Brewers Co-operative pub in Auckland has also chosen not to offer contactless payment.
"Essentially the amount of money we’d spent on Paywave fees alone, we’d be able to hire another staff member," says manager Ben Hartigan.
Retailers are not charged a fee if a customer swipes or inserts their debit card, but if the card is tapped, a portion of the transaction goes to the bank and credit card company.
Recent research from Retail NZ showed the average fee charged for contactless transactions is 1.2 per cent, much higher than Australia (0.6 per cent) and Britain (0.3 per cent).
But Retail NZ’s Greg Harford says given the popularity of the technology it will become increasingly hard for businesses to resist.
Mastercard, Visa and the Bankers Association all say there are major benefits to using the technology, including smaller queues.
A Visa spokesperson said recent research showed New Zealand merchants who offer contactless payment see more than double the sales growth of those that don’t.
Mastercard’s New Zealand Country Manager Ruth Riviere told 1 NEWS that the fees also cover the cost of fraud protection and security.
But Kaffee Eis' Karl Tiefenbacher says, in this case, technology is working against them.
"Banks are benefiting and unfortunately small businesses are suffering and customers are certainly liking it but they’re probably not aware there is this big impact."