Credit & Debit Card Charges

As of this weekend (13th/14th Jan 2018) Companies are no longer allowed to add credit or debit card fees to their bills if they take payment using either of these methods. As outlined on the moneysavingexpert.com website this can be quite a lot of money:

Banning credit card fees should make a real difference on some purchases. For example, British Airways currently charges a 1% fee of up to £20 on credit cards, Ryanair charges 2% on credit cards and the DVLA a £2.50 fee on credit cards

It may seem like excellent news if you like to use a credit card for a lot of payments and particularly for things like business travel. However there is nothing in the new rules to stop businesses raising their prices to cover their lost income so it is highly likely that many prices will go up to cover the lost income.

The ban also covers services such as Paypal and ApplePay which are linked to card payments.

Extra fees such as “booking fees” however are not banned, they just cannot be linked to the payment type so must either be applied equally to all types of payment of not charged at all. So for example Just Eat have added 50p to every order as a ‘service charge’ whereas this used to be specifically for debit or credit card transactions.

Talking about the changes Economic Secretary to the Treasury, John Glen said:

It’s completely unfair for someone to be hit by a hidden fee just before they are about to make a purchase, so by scrapping these rip-off charges we are helping to give power back to the consumer.

As we build a fairer society, this added transparency ensures buyers can make informed choices about how they spend their hard-earned money.

The ban is in force across the EU so applies equally here and in the rest of the EU region. It is being enforced by Trading Standards so if you have been making these charges you must stop doing so and if you are being charged them, collect the details and ask for a refund. If none is forthcoming report the matter to your local Trading Standards office.

For full details there in more information on the gov.uk website at https://www.gov.uk/government/news/card-surcharge-ban-means-no-more-nasty-surprises-for-shoppers.

As always in you need any help with accounting or bookkeeping for your business or you are a sole trader then please get in touch, we would be happy to help.

 

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