Retail New Zealand says banks and credit card companies are charging Kiwi retailers much more for contactless and 'Paywave' transactions than other countries - and it is pushing up the price of goods for everyone.

The organisation says it has heard of retailers in New Zealand being charged up to 3.5 per cent transaction fees, with an average of 1.6 per cent - the average in the UK is 0.2 per cent.

Greg Harford, speaking this morning to TVNZ 1's Breakfast programme, said the fees largely come from banks charging each other fees, which are passed on to consumers, but also that credit card companies are playing a part as well.

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"New Zealand is one of the few countries in the world where credit card interchange fees are not regulated - so there's no government regulation around how much the banks and card companies are allowed to charge," Mr Harford said.

"Much of the cost involved in merchant fees results from the banks charging each other for the transaction - so much of it rests with the banks, but the credit card companies obviously also have a role to play as well.

"Both Visa and Mastercard have moved, over recent months, to lower some of the fees that banks can charge each other ... we haven't yet seen that flow through into what's happening in the [New Zealand] market, though."

Mr Harford says that, because retailers incorporate contactless transaction fees into the price of their goods and services, even those who don't use contactless payment are essentially paying for it.

"The costs of these transactions are all wrapped up into the costs of good and services that we buy," he said.

"It makes the costs of goods and services more expensive for everyone in New Zealand, even if you're paying by cash.

"Consumers certainly love the convenience of contactless technology - it's faster to make a payment, it allows you to use Apple Pay and similar applications on your phone as well, but it does come at a really big cost for the merchants and ultimately every retailer needs to make its own call as to whether the value and the speed of transactions outweighs the cost.