Independent Money Feed
Companies and service providers will no longer be allowed to charge customers for using a credit or debit card under a new law coming into effect on Saturday.
The Government in July last year unveiled its intention to introduce the ban, saying that up until now shoppers across the UK were being charged up to 20 per cent extra when paying by card for something like a flight.
It said at the time that while many industries had already acted to absorb the costs and not pass these on to consumers, the new rules will bring an end to the practice entirely.
The regulation will also tackle surcharging by local councils and government agencies. According to government figures, the total value of surcharges for debit and credit cards was an estimated £47m in 2010.
“Rip-off charges have no place in a modern Britain and that’s why card charging in Britain is about to come to an end,” the economic secretary to the Treasury, Stephen Barclay, said at the time. “This is about fairness and transparency.”
The rules form part of a broad set of new payment regulations that are based on an EU-wide directive. Saturday’s changes, however, are part of UK law so will remain in place even after Brexit.
Consumer advice site www.moneysavingexpert.com said that all big retailers were likely to continue accepting card payments after the changes come into effect, but it also noted that some smaller businesses might struggle to absorb the new costs.
Some already appear to be trying to get around the new costs by raising other service fees.
Just Eat was criticised earlier this week for introducing a 50p service charge on all orders. The online takeaway delivery company had previously added a 50p charge to card transactions but from now all customers will have to pay it.
A spokesperson for Just Eat said the company’s new approach was introduced to make its system fairer.
“Previously, only customers who paid online were charged – we don’t think it’s fair for online payment customers to shoulder the costs associated with cash orders too, which is why we’re introducing a charge applied equally across our customer base,” the spokesperson said in a statement,” the spokesperson said.
According to the latest available data from The UK Card Association trade body, the total number of card transactions increased by 10 per cent to 19 billion across the UK in 2016, with corresponding values up by 5.5 per cent to £904bn.
Source: Independent Money News