MSE News: Credit and debit card charges banned from Saturday - what you need to know

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  • But can anyone explain what the actual point of this rule is?


    The situation today is you can choose to accept the cost of the CC payment or pay by another method or stop the transaction. There is nothing unfair about that.


    So what consumer protection is this supposed to bring? Assuming consumer protection is the reason behind these sort of regulations.
  • Nick_C
    Nick_C Posts: 7,442
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    But can anyone explain what the actual point of this rule is?

    The point is to stop consumers being ripped off.

    Currently, any CC surcharge must be reasonable and designed to cover the retailers cost of taking CCs.

    But it's hard to know what a reasonable charge is. And retailers have been able to average costs of to a flat fee, which can be a very high percentage on a small transaction.

    The new rule is simple and easy to enforce.
  • But consumers were not being ripped off unless they chose to be - they had three options: Accept the charge, use a different method, walk away.


    If credit card was the Only way to pay and this was an issue, then I can see the reason, but it isn't.


    I was quite happy to pay the surcharge at HMRC to get the air miles every time I paid my tax bill. The surcharge was a bargain to get 50K air miles pain free every year.
  • eskbanker
    eskbanker Posts: 30,399
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    blaggrr wrote: »
    Semantics methinks. As I read it, every business will, from this coming Saturday, be forced to remove surcharges for the particular types of payment it chooses to accept. So if a business anywhere in EU says it accepts VISA and Mastercard and hitherto has accepted all of them and continues to do so next week (and contrary to an earlier post, that will not just be businesses in 'tourist areas', but will include all the major supermarkets and fuel stations across Europe where all we out and about Europeans spend the larger proportion of our money daily), it must cease adding any surcharge for any VISA or Mastercard payment, no matter whether it was issued in country, or abroad, or whether it is a debit card or a credit card.
    What you say may well be true, but I can't see how it's relevant to the issue highlighted by lupus and discussed since, i.e. that the Dutch retailers referred to don't currently accept Visa and Mastercard ("Debit cards using the Visa or Mastercard systems [...] aren't accepted. Nor are credit cards at all")?

    As Nick_C correctly points out, the new regulations won't force them to change which cards they accept, but merely outlaw surcharging for accepted payment types.
  • eskbanker wrote: »
    What you say may well be true, but I can't see how it's relevant to the issue highlighted by lupus and discussed since, i.e. that the Dutch retailers referred to don't currently accept Visa and Mastercard ("Debit cards using the Visa or Mastercard systems [...] aren't accepted. Nor are credit cards at all")?

    As Nick_C correctly points out, the new regulations won't force them to change which cards they accept, but merely outlaw surcharging for accepted payment types.
    I wouldn't be so sure. It seems to me that Payment Services Directive 2 (PSD2) is a lot about breaking open closed networks and creating "open access". The bit we are talking about (no surcharges) is just one effect and maybe we are looking at PSD2 through the wrong end of the telescope if the overall effect will be to encourage consumers to expect to use any payment method they choose and thus to put pressure on merchants and upline payment services partners to make sure they offer what consumers want?
    But consumers were not being ripped off unless they chose to be - they had three options: Accept the charge, use a different method, walk away.
    Three options? That's wildly simplistic. I reckon the point of the new law is to radically change the dynamic within a somewhat wildly developed Payment Services environment, the full consequences of which no ordinary individual consumer could consciously have been expected to keep pace with.

    The dice had become loaded far too much against consumers in favour of the major payment networks and in favour of other controllers of large volumes of transactions. As I see it, the point of the directive was to redress the balance by removing all opportunity down the line to discriminate using surcharges.

    Signs that it was long ago going wrong were for example the introduction of DCC which perhaps was a sop to small business by their networks, and the moves made by the likes of Ryanair to exploit their own customer volumes, at one point discriminating between prepay Mastercards and other Mastercards. Both examples seem to have been designed to give the merchants a larger slice of the surcharge pie, but the real problem is the cartel-like charging structure of the main nefarious networks and their big bank partners. The new law hopefully puts pressure on the big boy payment services players via their soon to be more disgruntled networked merchants. Perhaps parts of the cartel will even start competing again? That's the hope, and if they do, then it should reduce prices for us a bit.

    So it is not we consumers who will have to decide if we still want to play - it'll be the merchants.
    They'll need to decide if they wish to walk away from one cartel or another and try something else to please their customers.

    I could walk down the road today and use maybe ten different 'direct' ways to pay for goods and services, including ApplePay, Pingit, ANOther mobile pay arrangement, Mastercard, VISA, ANOther national debit card network (like the Netherlands one), cash, PayPal, a Tesco Gift Card I received the other day instead of a refund ... oh and even Bitcoin, and further, I might indirectly use reward points be they Tesco Clubcard, Hertz Reward, or Airmiles. And I haven't even mentioned getting out my UK chequebook which I think was issued to me back in the 20th century, and is still half used, or Eurocheques (remember those?) or Travellers cheques!

    Is anyone seriously suggesting the Wild West in payment services should be allowed to continue to develop without new legislation to protect consumers interests from the otherwise inevitable exploits of the unscrupulous? I am criticising the scruples of the big boys more than the merchants of course, but there will still be a few ostriches amongst small business interests, with heads in sand. There will be struggles with more blindness and complacency between merchant businesses and the major networks before the smoke clears and everyone settles down again in some sort of new equilibrium, no doubt (at least until Payment Service Directive 3!).

    It is perhaps just a fact of life that a few lesser eggs will need to be cracked to rehash an acceptable payment services omelette in 2018, but those that keep serving what customers like will keep their business, won't they? If their business is aimed at locals only, then I agree it'll be their choice.
  • mkeane64
    mkeane64 Posts: 13 Forumite
    Being told that if you have a travel booking, and it was created before 18 July 2017, then the travel company still has the right to charge you the surcharge.

    Anyone got any thoughts on this please?
  • Nick_C
    Nick_C Posts: 7,442
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    mkeane64 wrote: »
    Being told that if you have a travel booking, and it was created before 18 July 2017, then the travel company still has the right to charge you the surcharge.

    Anyone got any thoughts on this please?

    Government guidelines :

    " The amendments to the Regulations (regulation 6A, and related amendments) apply to charges made on or after 13 January 2018, except for charges under contracts entered into before 18 July 2017;"

    https://www.google.co.uk/url?sa=t&source=web&rct=j&url=https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/664065/payment-surcharges-guidance.pdf&ved=2ahUKEwipxcqZl9DYAhXkLsAKHUMVBtEQFjACegQIEBAB&usg=AOvVaw1gAHglFPhI0gHTjsHL4ohM
  • JohnM5206
    JohnM5206 Posts: 136
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    edited 11 January 2018 at 5:43PM
    A conversation with local council in respect of Ringo parking payments elicited this reply:
    "...Council does not pass on the cost of taking payment by debit/credit for parking to customers. The only potential charge in addition to the fee for parking is made by Ringo where customers elect to use their services. Again the cost of taking the payment for parking if using a debit/credit card is met by the Council."
    The non optional fee is a "Convenience Fee" for paying by credit card
    £1 parking charge costs £1.20 if using a credit card.
    Would this qualify because a third party is involved in the payment for the service?
    JohnM
  • amstel2
    amstel2 Posts: 262
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    DonnySaver wrote: »
    My sandwich shop charges 50p for using a card if the price is below £5. Will they be able to continue doing this?

    Yes they can, find a different sandwich shop or make your own.

    Seriously though what annoys me is when they don't quote the minimum spend policy until your at the till about to pay with no signs up warning you. Several times i have encountered this & walked out without buying & that also included a sandwich shop. If they don't tell me when i walk in i ain't buying.
  • amstel2
    amstel2 Posts: 262
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    I_luv_cats wrote: »
    Just Eat in the news for adding 50p Service charge to all orders :rotfl:


    Cheeky or sneaky you make up your own mind :eek:

    If enough people ditch them they will have to drop the charge.
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