Charges for using Credit Cards

octavio6

I have just noticed that my energy company 'Ener-G Switch2' who charge for 'Hot Water' supplied to my apartment in a large building - this makes it possible for all apartments to be served from a central boiler rather than each apartment having an individual boiler - charge a set fee of £3.83 + V.A.T. per credit card payment to my account.
In one particular month I made two credit card payments totaling approx. £20 and was charged £9.19 which is obviously excessive!
I was really only looking at the balance on my Hot Water account, which I always kept in credit!
Are there any restrictions on what can be charged by the energy company?
Obviously I have stopped making payments in this way and will no longer keep my account in credit!

grumbler

MSE artcicles:
Credit and debit card fee clampdown begins
EU agrees card charges shake-up, but will shoppers pay less and ...

octavio6

Thanks!


Well Googled!

grumbler

I didn't google.
I used "Search MSE" tool in the top right corner.

octavio6

oh! Sorry!


I'd already seen the link you found by using Google.

ceredigion

Funny this thread appeared this morning. yesterday in a small antiques shop the sales assistant wanted to charge me 8%, this was on a credit or debit card. At the time I was pretty certain this was illegal though not entirely sure. So this morning I had a quick look around on the internet to refresh my memory then left them a message on their facebook page to tell them what I thought of their charges.
Needless to say I didn't buy the item on a point of principal.

apkitchenham

I'm still trying to work out how much a retailer can legally charge for the use of a debit or credit card. I'm still being charged a flat fee of £2 for the use of a credit or debit card on a bill of £50 by my taxi company (ie 4%). Have the new laws mentioned above come into effect yet (Jan 2016) and if so, what can you do when a retailer charges an excessive amount? I've mentioned to them that I think that it is illegal, but they just say that that is what they charge, so the attitude seems to be to take it or leave it

[Deleted User]

They can charge what it costs them. 4% doesn't sound unreasonable.

eskbanker

It sounds unreasonable to me to express it as a percentage if the retailer clearly states it's a flat fee - obviously the percentage will be inversely proportional to the amount of the bill!

However, given recent reductions in interchange rates, retailers should be reducing such charges in order to comply with the rules prohibiting them from profiting from such surcharges, but in practical terms it's impossible to know how much it actually costs them to process card payments....

bearcat16

eskbanker wrote: »

It sounds unreasonable to me to express it as a percentage if the retailer clearly states it's a flat fee - obviously the percentage will be inversely proportional to the amount of the bill!

However, given recent reductions in interchange rates, retailers should be reducing such charges in order to comply with the rules prohibiting them from profiting from such surcharges, but in practical terms it's impossible to know how much it actually costs them to process card payments....

There is a widespread misunderstanding of what "interchange fees" are, and what the EU's capping of them actually means. They are NOT the fees charged by retailers, and it's extremely unlikely that will reduce due to the EUs action.

This article on head for points explains it better than I can, but here's an excerpt:

"The interchange fee is NOT the fee that most shopkeepers pay when they accept a credit card. That fee is set by the bank they work with and includes terminal rental and various other services, plus an amount to recoup the interchange fee. There is no obligation for banks to reduce the fees charged to shops at all."

http://www.headforpoints.com/2015/04/14/why-we-really-dont-know-what-the-impact-of-credit-card-interchange-fee-capping-will-be/

eskbanker

bearcat16 wrote: »

There is a widespread misunderstanding of what "interchange fees" are, and what the EU's capping of them actually means. They are NOT the fees charged by retailers, and it's extremely unlikely that will reduce due to the EUs action.

I'm not aware of anyone claiming that interchange rates are the fees charged by retailers as they're clearly not! However, interchange rates do ultimately form a constituent part of the cost of taking card payments, so on what basis do you contend that it's 'extremely unlikely' that some cost reductions will be passed on along the chain from scheme to issuer to acquirer to merchant to customer, especially as competition for business takes effect?