Woodhouse MichaelHon MICHAEL WOODHOUSE (National): Thank you Mr Speaker and the whole House does support this bill. Despite a few ribbings and rebukes I can say that Mr McClay thought that Dr David Clark was campaigning on lowering merchant service fees in his candidate speech 11 years ago. I can tell the members that it wasn't that but eliminating poverty. He's having a damn sight better go at eliminating merchant service fees than he is about eliminating poverty.I'm just going to take a—Hon Simon Bridges: Poverty of ideas.Hon MICHAEL WOODHOUSE: That's exactly right Mr Bridges. I'm going to take a bit of a walk down memory lane because my first job after school was actually in retail banking. I was in the National Bank in Dunedin North branch at a time of cheque writing and zip-zaps. That was the way we transacted business and a couple of our—Hon Simon Bridges: And look at him now!Hon MICHAEL WOODHOUSE: —clients—thank you Mr Bridges—were student pubs in Dunedin. And on a Monday after a busy weekend they would come in literally with a satchel full of cheques and the cheques were written in various stages of inebriation usually not for very much—about $10 or $15—and often by the same account holder three or four times during the evening. It was quite interesting to watch: the handwriting changed the more cheques they wrote.Of course in those days cheques were subject to bounce and so the merchants took quite a bit of a risk in accepting a cheque. You would probably hand over some form of ID but those poor students with their bursary backstop accounts often got into overdraft more than their limit and those cheques bounced back. With credit cards of course payment was guaranteed and that's where the zip-zap comes in. I'm sure Mr O'Connor remembers the awful awful National Bank ad of that fellow in a three-piece suit dancing along the Parnell shopping mall saying something like Zip-zap the only card you really need is National Bank Visa." And it was a very good card but of course there was a whole pile of paper to be processed and the overhead of the Visa companies guaranteeing payment.So in the 1970s and 1980s when credit card use was a growing but very manual process it was probably quite acceptable to the merchants to have what was then a 3 or 3.5 percent service fee in return for the fact that once that transaction was completed it was guaranteed payment into the merchant's bank account. Now if you fast forward through the advent of the ATM and then the EFTPOS machine and then tap-and-go technology we are long past the point where there was any risk firstly either in cheques—because I don't know if anybody writes a cheque these days. Most banks don't even issue them. So there's—Hon Simon Bridges: Stuart Nash knows—Nashy knows a bit about tap and go!Hon MICHAEL WOODHOUSE: Ha ha! I won't even repeat that to put it on the Hansard—or maybe I just have. But obviously there's guaranteed payment through the EFTPOS system and of course there's no advantage to the merchants with the tap-and-go system for Visas because they already had a guaranteed payment. The banks of course had the great benefit of not having to process manually those millions of bits of paper and so they I think for years have been generating merchant service fees for a reason which has long since been made redundant. As Mr Bennett said I think the cost was something like about $74 million not on the merchant; almost probably three quarters of those costs are passed on to the customers. One could argue that the customer has a choice not to use their credit card but it has become a very convenient way of paying and then getting interest-free credit for 55 days. So there is actually a real benefit to doing so.Normally I would say that the State should not interfere with the private arrangements of purchaser and provider but I am going to suspend that philosophical view on this bill because actually I think unless there's a circuit breaker this will continue to be free money for banks because as I say the reason for having the fee in the first place has long since passed. There's a small fee maxima in here. That makes sense. I hope—well it is a forlorn hope—that the Government doesn't take this as carte blanche to interfere with other transactions between willing buyers and willing sellers. Indeed they're already doing that. They're doing that in private contract law between landlord and tenant through the omnibus bill and COVID-19 and a plethora of other unnecessary State interventions on private transactions. But on this one I can see the need if not the merit for doing so.So we'll support this at first reading. We'll be interested in what the merchants the customers the banks and of course the credit card companies will have to say about this. They'll probably have to swallow the rat and pretend that they like it and that it's good for their business. I doubt that it is but I also doubt that they're going to be losing too much sleep over the lost revenue. What will be good though is that this will ultimately benefit the consumers as much as the merchants and for that that's a good thing."