Credit and debit card surcharges will be banned in the UK from Saturday

By Dan Wilson January 12, 2018 - 8:35 am

Expecting shoppers to pay credit and debit card surcharges will be banned in the UK from Saturday, 13th January. That includes services taking payment for flights online or small shops around the corner. The new rule stems from EU legislation but the UK measures go further.

The EU requires an end to Visa and MasterCard surcharges but the UK is also banning charges for holders of American Express cards and users of services such as PayPal and Apple Pay.

Some retail groups have expressed a concern that prices will have to rise because of the measures but it should also act as a spur for retailers to examine what they pay and whether they can find a better deal from a different provider. In a blog post, payments provider Square, explores that theme: Why Banning Card Surcharges Isn’t Bad News For Small Businesses.

Shops and services can still require a minimum payment before accepting a card, maybe a £5 or £10 minimum, and such limits will still be acceptable. And, needless to say, retailers can refuse to accept cards if they choose. Admin or processing fees are also still permitted as long at they aren’t just related to card payments.

Interestingly, one organisation that will be ceasing to take credit card payments, once this change comes into force, will be UK tax authority HMRC. There were 454,000 cases of people in the self-assessment system paying for their tax bill by credit card in 2016-17. HMRC has been charging up to 0.6% for payment by credit card, and has said it would be unfair to expect other taxpayers to pick up the cost.

Obviously the changes stem from EU legislation UK rules are an extension of European rules under the second Payment Services Directive. But its unlikely that they will be rescinded after Brexit. These new rules have been written into UK law and will therefore continue after the UK leaves the EU in 2019.

  • Interesting.

    Not sure if this is the same category – I only emailed my UK bank this week asking why we pay a ‘non sterling transaction fee’ for Mastercard purchases in another currency yet this never appears on our Euro Mastercard statement.

    I wonder what TicketMaster will do to get around this law – I always thought it ‘wrong’ that they could charge so much on top of each ticket in a monopoly scenario.

  • Ben
    1 year ago

    Yay Phil won’t have to charge me 30p for buying a coffee anymore!

    • Ollie L
      1 year ago

      Sounds like this “Phil” is taking you for a ride, my coffee guy doesn’t charge me a penny for my drinks but then again I do make them myself.

  • Paul
    1 year ago

    Just went to tax my car on line with a credit card and it still tried to charge me £2.50.
    Why I ask you when its the government that’s bringing this ban in.

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