Businesses often add surcharges to the price of goods or services when consumers choose to pay by credit or debit card. Notable examples include the purchase of flights or music tickets. However, under the Consumer Rights (Payment Surcharges) Regulations, firms will no longer be able to charge ‘excessive’ fees for online credit and debit card payments.
Although businesses will still be able to charge for electronic payment methods, they will be prohibited from charging more than the cost borne by the trader for processing them. In other words, consumers are being protected from excessive charges, whilst traders are still able to recover the costs of processing payments. The new rules cover all industries, including local councils and the DVLA who have imposed such charges in the past.
The legislation follows recommendations from the Office of Fair Trading (OFT), with the ban -originally planned for next year – brought forward in line with the rest of Europe. It forms part of the Government’s drive to increase price transparency, make payment surcharges cost reflective and make it easier for consumers to compare prices.
Commenting on the ban, consumer group Which? said it hoped companies would ‘play fair’ and not pass on costs to customers in other ways.
Certain business sectors are excluded from the regulations, whilst new and micro-businesses will not need to comply until 12 June 2014.