Finance / Credit card payment fees to be scrapped
Credit card payment fees to be scrapped
4 August 2017
Government plans to end surcharging practice by next January.
Consumers will no longer be penalised for paying on a credit card as the UK government brings in new regulation to ban the practice of surcharging by the end of January next year.
Surcharging has been used in the past by retailers, airlines and restaurants to charge consumers as much as 20 per cent extra for those who want to pay by credit card. The rules will also tackle surcharging by local councils and government agencies.
In 2010, the total value of surcharges for debit and credit cards was an estimated £473 million.
Stephen Barclay, the Economic Secretary to the Treasury, said: “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.
“This is about fairness and transparency, and so from next year there will be no more nasty surprises for people at the check-out just for using a card.
“These small charges can really add up and this change will mean shoppers across the country have that bit of extra cash to spend on the things that matter to them.”
The government has previously capped the costs businesses face for processing card payments, and will engage with retailers to assess if there is any more that can be done to help.
Elsewhere, the British Retail Consortium (BRC) annual Payments Survey revealed that cards accounted for more than 50 per cent of retail transactions by volume.
This has been driven partly by UK customers increasingly using cards for lower-value payments and retailers investing in technology to give customers greater choice over how they pay for their goods both in store and online.
This article was published in our Business Reporter Online: Future of Retail.
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