Firms banned from charging credit card fees
Retailers and businesses are no longer able to charge consumers extra for using a credit card to pay for goods or services.
Interchange fees charged by firms on people who paid by credit card were banned on 13 January 2018 on the back of a widespread piece of EU legislation.
Some were previously surcharging consumers up to 3%, despite the cost to businesses that let people pay by credit card being capped at 0.3% by another EU ruling in December 2015.
Larger surcharges have been more common among businesses with takeaway apps and airlines, while local councils and government agencies have also been affected by the ban.
HMRC was among the government agencies that were forced to stop accepting personal credit cards from people seeking to settle their tax bill.
According to the most recent statistics from the Treasury, the total value of surcharges for debit and credit cards in 2010 was an estimated £473 million.
Most small businesses have to cover the costs of processing customer payments by credit or debit card, which can run into hundreds of pounds a month.
Monthly fees involved with processing card payments include hire of the card machine, merchant service charges, minimum monthly service charges and chargeback fees.
While larger businesses should find it easier to absorb any loss of revenue, smaller firms seem more likely to adopt more drastic measures in a bid to circumvent the legislation.
Retailers are considering introducing a range of new measures such as new service charges, increasing shelf prices or refusing to accept credit card payments altogether.
For further information on Credit Card Charges, please contact Alan Williams on 023 8046 1201.