Merchant service fees explained

Understand when merchant service fees apply, what your fees are made up of, and how those fees are calculated.

Understanding merchant service fees

Merchant service fees (MSF) are the fees charged on certain card payments accepted through your Kiwibank merchant facility.

These fees help cover the costs associated with processing card transactions securely and efficiently, allowing your business to accept a range of payment methods from customers.

When merchant service fees apply

Merchant service fees may apply when you accept:

  1. 1
    Tahi

    Credit card payments

    Visa, Mastercard and UnionPay credit card payments.

  2. 2
    Rua

    Online payments

    Online card payments.

  3. 3
    Toru

    Contactless & mobile wallet payments

    Contactless debit and credit card payments, including payments made through mobile wallets such as Apple Pay and Google Pay.

When merchant service fees don't apply

Merchant service fees don't apply to New Zealand-issued EFTPOS transactions when a customer inserts or swipes their card and selects cheque or savings.

If you have QuickPay+ and take payment using DirectPay, these transactions also don't incur a merchant service fee.

What influences your merchant service fee

Merchant service fees can vary because different cards, payment methods and transaction types have different processing costs. For example, an online transaction may have different costs to an in-store transaction, and an international card may have different costs to a New Zealand-issued card.

How your merchant service fee is worked out

Your merchant service fee can vary based on:

  • Your price plan
    • The pricing plan your business is on.
  • Transaction value
    • The total value of card payments you process.
  • Transaction types
    • The types of transactions you process.
  • Card mix
    • The cards your customers use when making purchases.

What makes up your merchant service fee

Together, these charges make up your merchant service fee:

  • Interchange fee

    Paid to the card issuer (the bank that issued the card).

  • Card acceptance fee

    Covers the costs of securely processing card payments.

Fees

Your merchant service fee is made up of two components: interchange fee + card acceptance fee = merchant service fee:

Interchange fee

The interchange fee is paid to the bank that issued your customer's card.

It's typically the largest and most variable component of your merchant service fee and may vary depending on:

  • The type of card used
  • How the transaction was processed, for example online, contactless or in-store
  • The country where the card was issued

Card acceptance fee

The card acceptance fee covers the other costs involved in processing card transactions through your merchant facility. It includes:

  • Scheme fee
    • A fee paid to the card scheme, such as Visa, Mastercard or UnionPay, that enables cards to be used across payment networks worldwide.
  • Network transaction fee
    • A fee paid to payment network providers for processing transactions. This is generally a fixed fee per transaction.
  • Kiwibank acquiring margin
    • A fee that helps cover the costs of providing your merchant service, including customer support, fraud prevention, disputed transaction management and operational costs associated with processing card payments.

Pricing options

Your merchant service fee may be calculated using one of our available pricing options. The option that applies to your business will be outlined in your Letter of Offer documentation.

Standard pricing

With standard pricing, you pay:

  • The actual interchange fee associated with each transaction.
  • Your merchant service fee is calculated using your average transaction size. This is based on the total net value of accepted Visa and Mastercard transactions divided by the total number of transactions processed. The card acceptance fee you pay is determined by the pricing matrix outlined in your Letter of Offer.

Interchange Plus

With Interchange Plus pricing, you pay:

  • The actual interchange fee associated with each transaction
  • A margin that covers scheme fees, network transaction fees and Kiwibank's acquiring margin

Get help understanding your fees

If you'd like help understanding how merchant service fees apply to your business or which pricing option you're on, get in touch with our Merchant Services team.

Enquire online

Complete our online form and one of business banking specialists will get back to you within one to three working days.

Enquire online

Call us

Call our merchant services team on 0800 233 824, or +64 4 803 1646 if you’re calling from overseas, Monday to Friday, 8 am – 4.30 pm.

Call 0800 233 824
 

Explore merchant payment options

Compare payment options