Did you know that, starting this month, consumers will not be charged extra for paying by debit or credit card?
Airlines and takeaway apps in particular have become notorious for adding a fee when you pay for your return trip to Malaga or a chicken madras on a Friday night by card.
The percentages charged vary – a Ryanair booking would set you back 2% of the final bill and many airlines started to drop or reduce their fees before 2018, while take away apps like JustEat and Hungerhouse could slap on an additional 5%. albeit for a smaller total.
This enlightened policy came about after a directive from the European Union, banning surcharges on Visa and Mastercard payments. The government has thrown the net wider by banning charges on American Express and Paypal too.
The UK govenrment’s Treasury estimates that in 2010, consumers spent £473m on such charges, and as card use has grown significantly over the last 7 years the 2017 figure must be an eye-watering amount!
Some companies may just put up their prices, to cover the extra costs of card payments. Banks typically charge large retailers between 10p and 20p for each debit card transaction, or 0.6% for credit cards.
It is unclear how the ban on credit card surcharges will be policed. According to the Consumer Rights Regulations, businesses are only allowed to charge a sum that reflects their own costs in processing a transaction.
Some small shops charge a fee for the use of a card, or minimum spend, but they also pay more for processing such transactions.