Debit card charge?

Tim68

Hi, after some advice please. I have recently purchased a new kitchen and paid the bulk of it physically in the kitchen companies shop using their chip and pin machine via my Visa Debit card.

My understanding is debit cards do not incur the % charge often experienced with credit card transactions, but on receiving my final invoice for the outstanding amount they are trying to charge me 1.5% for the debit transaction. On the cost of the kitchen this about £250!

Now at no point did they inform me of this charge or I would have never used my debit card, but I would really like to get the facts on what they would actually incur for a visa debit transaction?

If any experts can advise I would be very grateful

Thanks

Tim

EarthBoy

They can charge what they like, but they should have told you about it first.

eskbanker

EarthBoy wrote: »

They can charge what they like, but they should have told you about it first.

They can't charge what they like, they're only allowed to charge what it costs them!

However, the nub of the issue is obviously that it isn't practical for a customer to establish and/or verify the cost of taking payment by debit card, which will vary widely between businesses according to the terms of their agreement with their merchant services provider, i.e. you won't get a factual answer that the transaction cost them x%.

As I understand it, it used to be normal practice for such agreements to nominate a small fixed charge for debit cards and a (more significant) percentage for credit cards, but I believe that even debit card transaction fees often involve a percentage now, even though these are typically much lower than those for credit cards.

Are the card payment charges mentioned anywhere within their terms of business governing your contract with them, even if you hadn't seen these prior to paying?

Also, I don't know for sure but was under the impression that any such surcharge had to be added to the amount you explicitly authorise when paying, i.e. if they want to surcharge 1.5% on an in-store £10,000 payment then you need to be shown an amount of £10,150 on the pinpad, rather than this being added after the event. What does the machine-generated payment receipt say?

bengalknights

debit cards generally cost around 60p to process, credit cards around 2.5%

eskbanker

bengalknights wrote: »

debit cards generally cost around 60p to process, credit cards around 2.5%

But my point is that you can't meaningfully generalise like that, because merchants are charged not just variable amounts but variable charging structures.

In a recent thread on here, a poster who sounded like they were a small travel agent (and therefore potentially similar to a kitchen supplier in terms of low-volume high-value sales), stated that "We are charged 0.69080% for processing debit cards" which, while clearly lower than 1.5%, also bears no resemblance to 60p on a large sale.

dj1471

All of the above discussion is correct, however the key point here is that the OP wasn't informed of the charge prior to payment. That being the case the company have no basis for charging it, assuming of course that the charge genuinely wasn't mentioned anywhere in any paperwork that was signed or in any T&Cs that were provided.

It's also common practice for card fees to be charged when the payment is actually made, but it sounds like that didn't happen in this case and the fee is being charged after-the-fact, which is unusual.

jonesMUFCforever

I thought that since last year debit cards can be % based as well as credit cards.
Just look at any high street bank's business tariff (in particular card terminals etc).

EarthBoy

eskbanker wrote: »

They can't charge what they like, they're only allowed to charge what it costs them!

My mistake, I should have said they could charge "if" they like, not "what" they like.

Fingerbobs

bengalknights wrote: »

debit cards generally cost around 60p to process, credit cards around 2.5%

Wait, I thought these fees were capped at 0.2% and 0.3% for debit and credit cards respectively now?

YorkshireBoy

Fingerbobs wrote: »

Wait, I thought these fees were capped at 0.2% and 0.3% for debit and credit cards respectively now?

Those are the caps on the interchange fees, which are not the only costs involved in taking payment by card.


Further changes coming in January 2018, when you won't know how much you've paid...but you can be sure it will be the same or more than it is now!

Fingerbobs

YorkshireBoy wrote: »

Those are the caps on the interchange fees, which are not the only costs involved in taking payment by card.

I acknowledge there are other costs, but aren't these other costs flat-rate? I thought the interchange fees were the only per-transaction costs?