Small businesses are cautiously optimistic a drop in charges for accepting credit card and contactless payments will help with cashflow woes.
Visa and Mastercard have both agreed to reduce the interchange fees they charge banks whenever a customer pays using one of their issued cards.
The fees, along with bank fees and charges such as eftpos terminal hire are passed to the business owner.
These fees bundled together - known as merchant service fees - have long been a pain point for businesses. The costs for accepting credit card and contactless payments can be prohibitive.
Advocacy group Small Business Voice chief executive Max Whitehead said it was great news.
"Small businesses rely heavily on their customers to pay by credit card... most people today don't deal in cash - the credit card is critical."
However, he was concerned about how the savings would trickle down.
"The concern I have is will the banks pass it on? They have enormous control.
"I would be extremely disappointed and I think the public would be too if this wasn't passed down through small businesses through to the consumer."
Retail NZ chief executive Greg Harford said Mastercard's change would come into effect today, and Visa's on 15 August.
"This should be reducing overall rates on most credit and debit transactions by somewhere between 10 and 20 basis points so we'd expect merchant fees themselves coming down by at least that much."
"Merchants who are on an interchange plus arrangement with their bank will see immediate reductions in their bill in August and those reductions will get bigger in September once Visa's reductions come into full effect.
Merchants on a bundled rate should make sure they were getting the benefits of lower interchange fees.
He said merchants should not be paying more than 0.6 percent per debit card (contactless) transaction and 1.4 percent for credit card transactions.
"I was talking to a merchant this morning who was quoted 4.75 percent which is well above the odds and certainly not what they should be paying."
The percentage charged per transaction does depend on a businesses turnover through the till and the type of card being used to pay.
Westpac bank has already come out saying it would roll out a new pricing structure, which would charge merchants 0.6 percent per contactless transaction, and credit card transactions would be less than they currently are.
General manager Karen Silk said the changes would result in substantial savings, particularly for small businesses where transaction volumes were typically lower and as a result costs have been higher.
"For example, a cafe owner with relatively low volumes of transactions may have paid 10 to 15 cents in fees when processing a debit contactless payment for a $5 coffee. Now, they will only pay 3 cents," Silk said.
Demand for contactless payments had also increased since the Covid-19 pandemic and banks waived fees for contactless payments for a time, however they have now resumed.