Burger King will no longer accepted payWave as a payment option due to the "significantly higher fees".

More retailers are ditching contactless payments due to the "substantial" costs of offering the service to shoppers, a retail expert says.

Burger King has stopped accepting contactless payment at its stores due to high service charges from banks and card companies.

Have you stopped using PayWave or PayPass at your shop? Email us on businessday@stuff.co.nz

A Burger King spokesman said the fees were "significantly higher" than for other payment methods. He would not comment further.

Retail NZ spokesman Greg Harford said Burger King were one of many retailers no longer offering the service because of the cost.

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In addition, there were many retailers that had never switched on the contactless payment option, Harford said.

Last year, some retailers starting imposing surcharges on customers who chose to use payWave or payPass.

ROBERT CHARLES/STUFF Retail NZ spokesman Greg Harford says traditional transactions, where the customer swipes or inserts their card, are "essentially free" for the retailer, while contactless debit card payments carry "substantial costs".

In January, Ripe Coffee Roasters introduced a 2 per cent surcharge on all payWave transactions at its five independent coffee bars around Wellington.

In New Zealand, eftpos transactions were "essentially free" for the retailer, however, for contactless debit card payments, the retailer incurred "substantial costs", Harford said.

Research from Retail NZ shows New Zealand retailers are paying 1.2 per cent for every swipe of a contactless debit card, while in Australia retailers pay 0.6 per cent, and UK retailers pay 0.2 per cent.

The figures were similar for contactless credit card payments.

There was no regulation of the interchange fees New Zealand banks charged each other for credit and contactless debit transactions, which was why there were big differences in fees between New Zealand, Australia and the UK, he said.

Interchange was a key component of the service fee paid by a retailer.

In April, both Visa and Mastercard took steps to reduce some of the interchange fees that apply in New Zealand, Harford said.

"We are really pleased with this and expect it will have some impact on the fees merchants pay, but the costs in New Zealand are still likely to be substantially higher than in the UK and Australia."

Research from Retail NZ shows New Zealand retailers are paying 1.2 per cent for every swipe of a contactless debit card, while in Australia retailers pay 0.6 per cent, and UK retailers pay 0.2 per cent.

Consumers liked contactless payments because it was quicker than having to insert a card, he said.

Contactless technology also allowed customers to use ApplePay and similar services, meaning they did not have to carry a card at all, Harford said.

"However, this all comes at a substantial cost for the [retailer]."