The 'no paywave' sign may soon become a thing of the past - as new legislation to regulate transaction charges is announced.
Caps will be set on the amount banks can charge retailers for credit and debit payments.
Lowering these fees is expected to save businesses $74 million a year - with the hopes the savings will be passed on to consumers.
The Shucker Brothers' and Island Gelato co-owner Geoff Tippett said any reduction in merchant service fees will be a relief.
"Because we're a high volume paywave customer it's a huge saving for us. It's probably the one block to going fully card only without cash is the cost of the paywave fees. Considering everything else has been going up in the last year this is a good relief."
He said more people are using contactless payments since the pandemic, resulting in more fees for the business.
"Downtown here in Auckland hasn't just been about Covid. The no tourists and roadworks have all been pretty hard to handle in the local hospo industry," Tippett said.
"Any saving on that kind of thing is fantastic. Cash handling for us is a hassle but the fees have been so high that we've not gone fully cashless. Savings on those merchant fees are a big win for us."
Commerce and Consumer Affairs Minister, David Clark, said Covid-19 has changed the way people pay.
"People have shifted from the eftpos system increasingly to contactless methods of payment. That has a really direct impact on retailers and we think they need a fair deal. We also know that consumers pick up the tab for that in many cases, so we want to make sure that consumers also get that fair go with the change in practice that's out there."
It doesn't cost businesses if customers swipe or pop their debit card in the eftpos machine. But the banks charge them for contactless and credit card payments - and right now the amount is unregulated.
Whilst many businesses absorb the cost, others pass it onto the consumer, adding a percentage for those types of transactions.
But it's hoped the new Retail Payments Systems Bill - which will be introduced later this year - will make that a thing of the past.
It aims to bring the amount merchants pay banks for card transactions in line with Australia.
Retail NZ chief executive Greg Harford said it has been a long time coming.
"This is really positive news for the retail sector. We've been campaigning for lower merchant fees for some time. It's great that we're seeing decisive action by the government which hopefully will flow through to some lower fees being charged by merchants and, ultimately, consumers will benefit from that."
Clark said the government's been forced to introduce regulations - because banks didn't voluntarily reduce fees.
"I am disappointed that there hasn't been more movement voluntarily and that's why we are taking steps to regulate," he said.
"I expect the banks to start moving. They are profitable in Australia where fees, in many of these cases, are about half what they are here. We think there's room for movement and we've set out a path in legislation that will see interchange fees lower and we expect the banks to start moving there.
The Commerce Commission will also be given powers to regulate and monitor the retail payments system.
Clark said consumers should expect any cost savings to be passed on.
"Many of our small businesses are living on the edge here and this will make their lives simpler but also, in order to survive, they're going to have to pass on savings to consumers in the competitive environment that we see."
Retailers also face hefty fees for buy now pay later.
Harford said there is more work to do to reduce costs for businesses.
"This is a great first step. We'd like to encourage the government to look at the whole of the merchant fee that is being charged not just the interchange component of that."
The full regulatory regime for merchant service fees will come into effect next year.
