Westpac NZ is moving to new tiered systems for its consumer credit card rewards following regulatory changes that cap some fees paid by merchants.
The bank is contacting Airpoints™ and hotpoints® cardholders about the changes, which will take effect from 1 February 2023.
As an example, a customer with a Westpac Airpoints Mastercard® currently earns 1 Airpoints Dollar™ for every $130 spent on eligible purchases up to a cap of $60,000.
Under the revised programme, they will earn 1 Airpoints Dollar for every $150 spent for the first $3500 of eligible purchases in a month.
For any eligible spending over $3500, they will earn 1 Airpoints Dollar for every $300 spent.
Westpac NZ Chief Product Officer Kerry Conway says the bank is focussed on delivering balanced pricing and rewards.
“We know our customers really value their rewards, so we have worked hard to make sure our programmes continue to offer good value.
“The tiered system works well overseas and we’ve tested the idea successfully with our customers.”
Ms Conway says the Retail Payment System Act 2022 has capped the interchange fees paid by retailers and other businesses that accept certain card payments.
“These fees are paid by merchants when one of our cardholders makes a purchase and contribute to the card rewards, as well as fraud protection, processing costs and cardholder services.
“Although income from these fees has decreased, we aren’t passing on the full cost to our cardholders through the reward changes announced today.
“Instead, most of the cost of this change is being absorbed by Westpac.”
Ms Conway says existing reward earn rates will stay locked in until the end of January 2023.
“We have held off making the change until early next year, which means cardholders will be able to earn rewards at the rate they’re currently on through the Christmas and New Year holiday period.”
Westpac has a range of credit cards, including the Westpac Fee Free Mastercard, which went live in October.
The card does not offer any rewards but is completely free of fees. If cash advances are avoided and purchases are paid in full by the due date, there will be no cost to a customer to use it.*
The Westpac Airpoints Debit Mastercard earn rate is also changing from 1 February 2023, but is not moving to a tiered system.
