When you run an online store or invoice clients remotely in Aotearoa, card processing fees can eat into your profit margins. While accepting debit and credit cards is essential for keeping cash flow moving, many Kiwi businesses look for ways to recover those transaction costs.
Credit card surcharging lets you pass processing fees directly on to the customer who chooses to pay by card. Here is a straight up guide on how credit card surcharging works in New Zealand, how to implement it fairly, and how Paystation makes it simple to manage.
How credit card surcharging works
A surcharge is an additional fee added to a transaction when a customer selects a specific payment method, such as a Visa or Mastercard credit card.
Instead of raising your overall prices for everyone, surcharging ensures that only the customers using higher-cost payment methods cover those processing fees.
In New Zealand, guidelines from the Commerce Commission require surcharges to reflect the actual cost of processing the payment. You should never use surcharges as a profit center – the goal is simply to break even on your bank’s Merchant Service Fees (MSFs).
Two ways to apply surcharges in Paystation
Our admin portal gives you total control over how surcharges are calculated and applied across your sales channels:
- Percentage-based surcharges: You can set a percentage rate (for example, 1.5% or 2%) that automatically calculates based on the transaction total. This is ideal for online checkouts and invoicing where transaction amounts vary.
- Fixed-fee surcharges: You can set a flat dollar fee (such as $2.50) per transaction. This works well for administrative MOTO payments or specific fixed-fee services.
Once enabled in your account settings, our gateway automatically calculates and displays the fee at checkout before the payment is processed.
Adding surcharges to PayMe links and back-office billing
Surcharging isn’t just for eCommerce shopping carts. If your back-office team takes manual card payments over the phone or sends digital invoices using our PayMe tool, you can enable surcharges for these workflows too.
When you generate a PayMe link for a client, the surcharge is clearly itemised on their payment screen. Your client sees the exact charge breakdown before entering their card details, keeping your billing transparent and trustworthy.
Best practices for transparent surcharging
To maintain great relationships with your customers and stay compliant with New Zealand consumer guidelines, follow these simple rules:
- Be upfront: Always display the surcharge amount or percentage clearly before the customer completes thelir payment.
- Provide a fee-free alternative: Where possible, offer an alternative payment method that doesn’t incur a surcharge, such as POLi bank payments or direct bank transfers.
- Keep it accurate: Align your surcharge percentage with the actual merchant fees charged by your acquiring bank.
Why a linked gateway gives you better fee control
Because Paystation operates as a dedicated payment gateway rather than a flat-rate payment facilitator, you hold your own Merchant ID directly with your local bank (ANZ, ASB, BNZ, Kiwibank, or Westpac).
This means you can negotiate your Merchant Service Fees directly with your bank as your business grows. When your bank fees drop, you can lower your surcharge rate accordingly – passing those savings on to your customers while keeping your own costs at zero.
