Charging more for use of debit/credit cards rather than direct debit

General_Grant

I understand retails shops should not charge differential prices between cash or using a debit or credit card.

However, I guess that it is OK for a service provider (not a utility company) to charge more for using a card rather than the lower price for setting up a direct debit.

Can someone confirm that my guess is correct?

eskbanker

As I understand it, charging lower prices for payment by direct debit doesn't breach the rule about not surcharging for credit/debit cards, regardless of the type of business.

user1977

Are you comparing like with like? e.g. one-off card payment versus 12 month contract via direct debit?

Might also depend on what the service is!

Alderbank

They don't charge more for using a card. They give a discount for accepting payment by Direct Debit.

All is explained here:
https://www.directdebit.co.uk/direct-debit-explained/benefits/#:~:text=Businesses%20find%20Direct%20Debit%20just,how%20much%20you%20can%20save.

la531983

The legislation is poor tbh. A market trader near me recently put all his prices up by 20p on the same day he started accepting cards, and put up a sign saying cash payments will knock 20p off all prices. 

It's essentially a card payment fee and it stinks. 

eskbanker

la531983 said:

The legislation is poor tbh. A market trader near me recently put all his prices up by 20p on the same day he started accepting cards, and put up a sign saying cash payments will knock 20p off all prices. 

It's essentially a card payment fee and it stinks. 

But that is a clear breach of the rules - a cash discount is just as invalid as a card surcharge.

However, direct debit is a different story.... 

General_Grant

user1977 said:

Are you comparing like with like? e.g. one-off card payment versus 12 month contract via direct debit?

Might also depend on what the service is!

one-off payment for an annual membership (8.75% more exopensive to pay by card online) - 

I haven't moved on to actually join but suspect the direct debit would be for automatic renewal unless one diarises to cancel

la531983

eskbanker said:

la531983 said:

The legislation is poor tbh. A market trader near me recently put all his prices up by 20p on the same day he started accepting cards, and put up a sign saying cash payments will knock 20p off all prices. 

It's essentially a card payment fee and it stinks. 

But that is a clear breach of the rules - a cash discount is just as invalid as a card surcharge.

However, direct debit is a different story.... 

I reported it to Trading Standards the day he instituted it. Not had a reply to it and this was a few weeks back. So they clearly don't care as he is still "at it". 

eskbanker

la531983 said:

eskbanker said:

la531983 said:

The legislation is poor tbh. A market trader near me recently put all his prices up by 20p on the same day he started accepting cards, and put up a sign saying cash payments will knock 20p off all prices. 

It's essentially a card payment fee and it stinks. 

But that is a clear breach of the rules - a cash discount is just as invalid as a card surcharge.

However, direct debit is a different story.... 

I reported it to Trading Standards the day he instituted it. Not had a reply to it and this was a few weeks back. So they clearly don't care as he is still "at it". 

I could be wrong but can't imagine that Trading Standards will drop everything and leap into action because a market trader is differentially increasing prices by 20p, but that doesn't mean that his actions are legal!  In other words, there's not necessarily anything wrong with the legislation itself, but enforcement may be patchy....

DullGreyGuy

la531983 said:

The legislation is poor tbh. A market trader near me recently put all his prices up by 20p on the same day he started accepting cards, and put up a sign saying cash payments will knock 20p off all prices. 

It's essentially a card payment fee and it stinks. 

If its poor or not depends on what you think the purpose of the legislation was... if you read the government's write up it was to stop "nasty surprises" when you came to pay and so that is achieved as long as the sticker/shelf price is what a card payer will pay. 

In many jurisdictions outside the UK they stopped at that and so cash discounting is perfectly acceptable. Our legislation was updated and goes further to stop people from being able to discount just for cash. So if you can be bothered you could report the market trader to Trading Standards for enforcement. 

la531983

I have, weeks down the line I have had no reply and he is still doing it.