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Issuers and acquirers in New Zealand will have more say in what they ultimately pay to accept Visa cards through an agreement the card brand reached this week with country's commerce commission. The agreement, which ends more than two years of dispute between regulators and the card company, generally is unfavorable to Visa Inc. Besides paying NZ$2.6 million (US$1.8 million or 1.2 million euros) to compensate the commission for its costs in the case, Visa must allow issuers to "individually set" interchange rates for New Zealand-acquired transactions, according to a statement from the commission. (In its own statement, Visa says issuers and acquirers can "negotiate" those rates.) The rates, subject to "maximum rates determined by Visa," are to be publicly posted, likely through Visa's Web site, the commission says. The ruling will take effect no later than 17 April 2010. Additionally, regulators will allow merchants to assess surcharges on credit card transactions and take other measure to encourage customers to "pay by other means," the commission says. In its statement, Visa maintains "that surcharging is harmful to consumers." The commission also says "nonbank organizations or companies [that] wish to provide acquiring services to merchants [can] join the Visa network if they meet relevant financial and prudential criteria." In a statement, Mark Berry, commission chairman, said the actions will lead to more "competition between companies that provide credit card services to retailers in New Zealand." In its statement, Visa admitted no wrongdoing and said it will not have to pay any "penalties" as part of the agreement, which the card company called "a cooperative settlement … based on market dynamics." Financial institutions have issued more than 2 million Visa-branded cards in New Zealand, according to the commission. The commission has similar interchange cases against MasterCard Worldwide and various banks, including Bank of New Zealand. The commission says those claims are due for court hearings in October.
