New Zealand will ban surcharges applied to in-store electronic payments from next year, Commerce Minister Scott Simpson said.

The government will introduce the Retail Payment System (Ban on Surcharges) Amendment Bill by the end of this year and the ban will be in place by May 2026 at the latest, Simpson said in a statement Monday in Wellington.

“Surcharges are a hassle and an unwelcome surprise when shoppers get to the till,” he said. “We’re banning surcharges so consumers can shop with confidence knowing how much they will pay for their purchases.”

Surcharges are an amount calculated as a percentage of the purchase price and are applied to transactions to cover the fees businesses pay for accepting contactless payments and credit cards. There has been criticism that the charges exceed those fees and complaints over the lack of disclosure of the charges by retailers and other businesses.

Simpson said New Zealand consumers pay NZ$150 million ($90 million) in surcharges a year, of which an estimated NZ$65 million are excessive.

“A ban on surcharges means no more surprises for people who currently feel like they’re being charged to use their own hard-earned money,” he said. “It means they can make a purchase knowing exactly what they’ll pay, and how they’ll pay it.”

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The Commerce Commission estimates New Zealand businesses pay NZ$600 million a year to accept Mastercard and Visa payments. Earlier this month it said it would regulate to reduce these so-called interchange fees, which it said should ease upward pressure on retail prices and reduce the level of surcharges.