By Nick Gelling
Product Test Journalist | Kaipūrongo Whakamātautau Hautaonga
Kiwibank is the only major bank to charge a fee on all transactions processed offshore – even purchases made locally in New Zealand dollars. It means an extra 1.85% on purchases from some overseas services, including the Microsoft Store, Apple App Store, Airbnb and Spotify.
All banks add a percentage-based fee when a customer buys something in a foreign currency. The fee is applied separately from the currency conversion rate and often applies to transactions made from websites not based in New Zealand.
However, Kiwibank’s international transaction fee is different. It can also apply to transactions in New Zealand dollars (NZD) and from websites with a “.co.nz” suffix. We checked all six other major banks in our banking survey, and none had an equivalent fee.
What’s changed and when
In November 2025, Kiwibank changed the fee structure of its debit and credit cards. It claims the changes leave around 80% of customers better off overall.
Several fees were removed, including overseas ATM withdrawal fees, card replacement fees and the Visa debit card annual fee. Fees on international transactions made in foreign currencies decreased from 2.5% to 1.85% on debit cards, bringing them in line with credit cards.
However, at the same time, this international transaction fee was expanded to apply to all transactions processed overseas, including those in NZD.
Previously, it was easy to tell when the international transaction fee would apply, because the amount to pay would be in a foreign currency. Now, it’s extremely difficult to tell – any online transaction could be routed through an overseas system and have the ticket clipped on the way.
While 1.85% may seem inconsequential, it applies to some significant transactions. Renting a modest two-bedroom Airbnb in the Coromandel for a week over summer costs about $1,750, meaning Kiwibank customers will pay an extra $32.
We’ve seen bank statements from several Kiwibank customers showing they were hit with the 1.85% fee for digital retailers including Spotify, Microsoft Store, Apple App Store and Steam.
How can you tell if you’ve been charged?
If you have a Kiwibank card, check your transaction history on the Kiwibank mobile app or internet banking website.
We’ve seen the fee represented differently for different customers. On some devices, it will show up as a separate transaction named “INTERNATIONAL TXN FEE”, immediately below the offending purchase. On others, the fee is bundled into the total cost, and users have to click on a transaction to see how much was due to the fee. On bank statements, the fee appears in small print below the transaction it applied to.
Can you avoid the fee?
Basically, you have two options: move banks or avoid retailers that process their payments overseas.
But this can be hard to figure out, because there’s no requirement for a store to say where its payments are made.
We got in touch with Kiwibank, which told us that an increasing number of international merchants have moved to local payment processing arrangements, and suggested customers “check with the merchant” if it is not clear where a transaction is processed.
When buying online, this is impractical at the best of times. Even if you can call or live-chat the store, it’s an inconvenient step to add to the buying journey, and there’s no guarantee the support staff you reach will even know where payments are processed.
Worse, many multinational corporations fail to provide any contact information, leaving consumers with no way at all to determine whether they’ll be charged the extra 1.85%.
We don’t think that’s reasonable. Consumers need to be told clearly, before they buy, whether they’re being charged the price on the tin.
Who is really making money?
Kiwibank isn’t just pocketing the 1.85% fee – it says the charge “reflects the true cost of processing payments through global networks”. In Kiwibank’s case, those costs include fees charged by Visa, its card provider. Mastercard, which services some other major New Zealand banks, charges similar fees.
So why aren’t other banks charging a fee for payments made in NZD but processed overseas? It seems they’ve opted to absorb the cost (or subsidise it via other fees), rather than pass it on to customers directly – for now.
A sign of things to come?
The biggest banks in New Zealand are owned by parent companies in Australia, where fees for offshore processing are commonplace. Indeed, Kiwibank told us its fee is “in line with international market practices (such as Australia and Singapore)”.
In Australia, ANZ charges a 3.5% fee on most credit card payments (and 3% on debit card payments) made in Australian dollars but processed outside of Oz – close to double the 1.85% that Kiwibank is charging here.
Westpac also charges its Australian customers a 3% offshore processing fee on most of its credit cards.
There’s no fee for New Zealand customers of either ANZ or Westpac (for now, at least).
It may be that Kiwibank is simply the first bank to break rank in New Zealand, and other banks will follow suit once the practice is normalised. In that case, if this is a change New Zealand consumers want to resist, we should make a fuss now so competing banks think twice.
Keeping more money in New Zealand?
Kiwibank told us that the change “[encourages] merchants to process payments locally, which supports jobs, tax contributions, and enables stronger consumer protections under New Zealand law”.
In other words, Kiwibank customers who are unhappy with the fee might stop giving their money to companies that process payments offshore. The companies might notice that their customers are annoyed and start processing payments locally – which might mean hiring more New Zealanders and paying local tax.
We’re sceptical about this theory, as nice as it sounds. It’s hard to imagine enough Kiwibank customers taking action that it would drive a company to change its systems. Many customers won’t even be aware of the extra fees they’re paying – partially because they don’t know where and when they’re going to be charged.
Still, if you do want to help bring payment processing onshore – even if you’re not a Kiwibank customer – it can’t hurt to vote with your wallet, or contact retailers that don’t offer local payments and ask them to consider it.
If you’re with Kiwibank, how do you feel?
We asked Kiwibank what kind of queries or complaints it had been getting about the new policy. Kiwibank said that, since the changes, it had received “very few enquiries relating to fees, including limited queries on international transaction fees”.
If you’d like to share your concerns with Kiwibank, customers can call 0800 113 355 or send an email-style message from the Kiwibank mobile app or internet banking website.
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