Card processing fee
curtis122
Posts: 177 Forumite
in Credit cards
I have read they are scrapping these come Jan next year but annoyingly I have to pay the outstanding charge for my holiday before then.
Their charge is 2% the total amount. As the outstanding amount to be paid is £6k that will be a charge of £150 this cannot be how much it cost to make a process a transaction charge.
It does not say anywhere 'up to' a certain amount for the charge so I'm assuming this will be what I will have to pay ! Is this correct can they do it on the whole amount?
Their charge is 2% the total amount. As the outstanding amount to be paid is £6k that will be a charge of £150 this cannot be how much it cost to make a process a transaction charge.
It does not say anywhere 'up to' a certain amount for the charge so I'm assuming this will be what I will have to pay ! Is this correct can they do it on the whole amount?
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Comments
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As the outstanding amount to be paid is £6k that will be a charge of £150 this cannot be how much it cost to make a process a transaction charge.
It can be.
It's correct that it's charged on the full amount.
If you have the savings, pay some on the card, and the rest by other means to reduce the total fee.0 -
I thought they were not allowed to make a profit on these fees surely that much is well over the actually cost??0
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You're right that they can't make a profit.
But we don't know what costs are making up the fee. From experience, it's certainly possible that 2% is an accurate reflection.0 -
but its 2% regardless of cost if you use a credit card so how can this be fair if the cost was only £2000 then the charge will be £40 but as it cost £6k then its £150 so how can it be £110 more to do the same thing?? Just does not seem right other than a money making scheme.0
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Because elements of the fee are charged as a %, not a flat sum. Eg the merchant fee.
A flat fee would mean that those spending less were subsidising those spending more.0 -
Their charge is 2% the total amount. As the outstanding amount to be paid is £6k that will be a charge of £150 .....
Not sure if you will see this as good news or not, however, 2% of £6,000 is £120, so you have already saved £30 :beer:
Or is the rate the even more ridiculous figure of 2.5% :mad:
I avoid those fees by saving up for my holiday first, then paying for it.
I know that is not the done way for many though.
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Debit cards such as switch charge a flat fee which is around 15p to 30P depending on the size of company and the amount of transactions they will take.
Credit cards however charge a percentage of the total price from around 1% to 4% again depending on the turnover of the company involved. 2% is probably about right so it's a cost the merchant charges and not profit as you might like to think.
When this becomes law the cost of the goods are just going to go up so in the end we will all pay for these costs anyway.0 -
Our company charges 50p on a debit card and 2% on a credit card as that is what is charged by the card machine company.
It's fairly accurate to cover our costs. For a fare of £60 we take a payment of £61.20, and receive about £60.09 into the bank account.
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The European Commission capped these fees over a year and both credit and debit cards are now (or should be charged as %) Any company claiming they still get charged 2% on a credit card should immediately be reviewing their facilities as they are probably making a turn on the processing.
The card schemes levy 0.20% for debit and 0.30% for credit onto the acquirer who then has to add their margin. Anything over 0.50% as a debit surcharge and 1.00% for credit is the acquirer taking the proverbial. I'd personally challenge them and ask to see their merchant statement. They are not meant to penalise the cardholder for using their card but can legitimately pass on what they incur. It's an absolute racket!0 -
Who would you personally challenge (merchant or acquirer) and have you actually done so? If, for the sake of argument, doing so unearthed that an acquirer charged a merchant (say) 2% for credit card transactions, which would be perfectly legal, then what?The European Commission capped these fees over a year and both credit and debit cards are now (or should be charged as %) Any company claiming they still get charged 2% on a credit card should immediately be reviewing their facilities as they are probably making a turn on the processing.
The card schemes levy 0.20% for debit and 0.30% for credit onto the acquirer who then has to add their margin. Anything over 0.50% as a debit surcharge and 1.00% for credit is the acquirer taking the proverbial. I'd personally challenge them and ask to see their merchant statement. They are not meant to penalise the cardholder for using their card but can legitimately pass on what they incur. It's an absolute racket!0
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