MSE News: Card surcharge ban moves closer

aleph_0

sharpy2010 wrote: »

To summarise, maybe the government think they're doing a favour by bringing in this rule whereby no card processing fees are allowed.

In reality, they are doing one of two things -:

1) Making things MORE expensive for us, as explained by Dazleech above.

2) Are they making up all these rules just to justify their job? If they aren't doing ANYTHING, then why are they there? But they ARE doing something, aren't they... making up silly card processing fee rules. So therefore their jobs do have a purpose. At least to them!

Firstly, fees are allowed. Just ones proportionate to the cost.

But the example doesn't work. In a competitive market, if they could have charged £70 before without putting £4 into fees, they would have done so. I expect we'll get one of two scenarios.

If the fee was for credit cards, but free for debit, most people would pay by debit card, the fee formed a small bonus profit on some customers. In which case, standard prices might increase slightly (say to £66.50), but not to the card+fee price. Their CC fees might be at 3%, so about £2.80 on this hypothetical purchase, which isn't putting is far off the original £4 fee anyway.

If the fee was an excessive Ryanair-style fee, then I agree the standard price will increase to nearer £70. But remember, Ryanair's competitors had less hidden fees before, so Ryanair won't always be able to increase price whilst remaining competitive.

Incidentally, the idea of charging a fee proportional to the cost to the retailer, I do agree with (but the advertised price should still be based on the cheapest reasonable payment method), and think should happen *more*. I don't like to subsidies someone paying by Amex when I'm paying by cheaper debit card, for example. But another time, I might be happier to pay by credit card if I think there's more risk of the company defaulting on the agreement, and I'd like the protection. Passing on the exact transaction cost allows consumers to make informed choices (and would allow me to go to Tesco and buy my shopping on a Debit Card for £1 less than someone paying by credit card!).

Ben8282

Charging a fee for use of a card used to be prohibited and the big mistake was ever allowing it in the first place. Bring in this regulation and we will go back to the old situation.

If a retailer wants to give an under the counter discount for cash, then let them!

pickpocketlocket

sharpy2010 wrote: »

But we're adults! We're capable of working out what is a good deal and what isn't, for ourselves!

It seems like the government think we're all morons not capable of coherent thought!

I don't know about anyone else, but personally I don't want/need someone thinking for me!

I think many consumers do fit this description. After all, why else would they be moaning about price rises but also moaning about ways to avoid those rises!

jonesMUFCforever

Ben8282 wrote: »

Charging a fee for use of a card used to be prohibited and the big mistake was ever allowing it in the first place. Bring in this regulation and we will go back to the old situation.

If a retailer wants to give an under the counter discount for cash, then let them!

I agree!

Airfares won't be more expensive than they are now - competition will see to that.
Now the scene is blurred because a cheap fare is masked by card fees etc
With the new regulation if a fee is say £30 then £30 you will pay.

johnmc

What about a charge for using credit cards on the Governments own systems?

Car tax (which costs the Government NOTHING) incurs a £2.50 CC charge online. DC are free.

As there is no value to the item you are paying £2.50 extra for being taxed.

aleph_0

johnmc wrote: »

What about a charge for using credit cards on the Governments own systems?

Car tax (which costs the Government NOTHING) incurs a £2.50 CC charge online. DC are free.

As there is no value to the item you are paying £2.50 extra for being taxed.

But it does cost the government money to process Credit Cards for VED, they've then decided on a flat rate as it's simpler:

the cost to DVLA for processing a credit card payment for
VED paid online ranges from £1.87 to £4.65. This compares to the cost of between 15p
and 27p for processing a debit card payment for VED online.

A card surcharge that cover the true extra cost of processing CCs is fine. It's when they're disproportionate that there's a problem. Without the surcharge, if you paid by CC, you'd actually only be paying, say, £97 tax, and £3 to cover the CC fees, whereas someone else would be paying £100 tax. The DVLA is saying if you want the extra benefits from paying by CC, then you should also pay the extra costs incurred. This seems perfectly reasonable.

redpete

molerat wrote: »

Could amend the title to be accurate and mention excessive / unfair.

Absolutely right - it might have stopped a lot of the debate on CC / DC surcharges per se if the title had been more accurate.

molerat

johnmc wrote: »

What about a charge for using credit cards on the Governments own systems?

Car tax (which costs the Government NOTHING) incurs a £2.50 CC charge online. DC are free.

As there is no value to the item you are paying £2.50 extra for being taxed.

This is why I posted :-

molerat wrote: »

Could amend the title to be accurate and mention excessive / unfair.

The emotive and inaccurate tabloid headline, which seems to be the standard MSE news way now, gives people the wrong idea. There is no move to ban charges, just unfair or excessive ones that are way over what the organisation is charged by their provider, and they must be clear an upfront.

chattychappy

molerat wrote: »

this is why i posted :- the emotive and inaccurate tabloid headline, which seems to be the standard mse news way now, gives people the wrong idea.

Yep... exactly.

quickstepqueen

So if a small business on the high street (not online) wishes to display a sign that says "Transactions under £10 will incur a fee of x (whatever the actual cost of that transaction fee will be eg 20p), will that be acceptable? Many small businesses get charged very high percentages for taking card payments and I'm seeing more and more people wanting to pay by card in the shop I work in. (Please note we never charge a fee for payments over £10.)