Example Leaderboard
Creditfix LB 03-2017

Businesses Increase Prices to Counter Credit Card Fee Ban

Businesses Increase Prices to Counter Credit Card Fee Ban

Credit card fees charged to consumers by businesses will be prohibited from January 13, but it seems that many retailers and other companies are planning measures to get around the new rules.

Some will be refusing credit card payments altogether, while others plan to increase prices to offset the cost. Some even intend to introduce new ‘service charges’ across the board.

Consumers paying with cash could also now be affected, as food delivery firm Just Eat plan to replace their 50p card surcharge with a new ‘service charge’ that applies to all orders. A Just Eat spokesman said the charge ‘ensures fairness for all’.

As previously reported, HMRC has confirmed that it will stop accepting credit card payments altogether, because it cannot afford to pay the fees without charging for them, as this would mean charging costs back to customers via the ‘public purse’ and creating a burden for taxpayers. Other large bodies could follow.

According to the Federation of Small Businesses, thousands of shops and businesses unable to absorb the cost intend to raise the price of items on shelves or refuse small card payments.

The new rules banning credit card fees were brought in to protect consumers who were being charged up to three per cent extra to use credit cards. This was despite the fact that the true cost to businesses of letting customers pay by credit cards is a fraction of this price.

Interchange fees, which retailers pay payment providers, were capped at 0.3 per cent by an EU ruling in December 2015, meaning that some retailers have been charging ten times the actual cost.

James Daley from campaign group Fairer Finance, commented: ‘It will mean prices will go up for customers and those who pay in cash will be worse off as a result. However, the new system will be fairer and more transparent and is still a victory to consumers.’

A spokesman from the Treasury said: ‘Banning surcharging will help protect consumers from rip-off charges. Pricing is a commercial decision for individual businesses and the ban will make it easier for consumers to compare prices and choose the right deal for them.’

Be the first to comment on "Businesses Increase Prices to Counter Credit Card Fee Ban"

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Password Reset
Please enter your e-mail address. You will receive a new password via e-mail.

%d bloggers like this:

By continuing to use the site, you agree to the use of cookies. more information

The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible.

If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.

If you want to know more about cookies Click here or want to read out Privacy Policy

Close