July 28 (Reuters) - The New Zealand government on Monday

proposed to ban surcharges on most payments in stores made using

debit and credit cards from May next year, a move which it said

could save roughly NZ$150 million ($90.2 million) for Kiwi

consumers.

The plan follows the decision last year by New Zealand's

Commerce Commission to lower fees that local businesses pay to

accept Visa and Mastercard ( MA ) payments.

"We are scrapping surcharges at the till. New Zealanders are

paying up to NZ$150 million in surcharges every year. That's

money that could be saved or spent elsewhere," Prime Minister

Christopher Luxon said.

"You no longer will be penalised for your choice of payment

method, whether that's tapping, swiping, or using your phone's

digital wallet," Luxon told reporters.

Visa and Mastercard ( MA ) did not immediately respond to a request

seeking comment.

The proposed ban will not include online payments or

transactions made using foreign-issued cards, prepaid, travel

and gift cards.

New Zealand's Commerce Commission estimates that consumers

pay about NZ$150 million in surcharges annually, including up to

NZ$65 million in excessive surcharges.

"Surcharges cover the fees businesses pay for accepting

contactless payments and credit cards, but we know these are

often excessive. In some cases, the retailer doesn't even make

it clear what the percentage is," Commerce Minister Scott

Simpson said in a statement.

The government plans to introduce the bill to ban most card

surcharges by the end of this year.

Shops in New Zealand typically charge consumers around 0.7%

for debit card payments and up to 2% for credit card payments,

according to New Zealand's Commerce Commission.

Australia's central bank this month proposed to scrap surcharges

on most debit and credit card payments for consumers, saying it

no longer achieved the intended purpose of steering consumers to

make more efficient payment choices.

($1 = 1.6633 New Zealand dollars)