Which? uses cookies to improve our sites and by continuing you agree to our cookies policy

Get ready for the ban on credit and debit card charges

By Rebecca Milligan

Changing regulations mean it will no longer be possible to charge customers a card-processing fee from mid-January 2018.
credit and debit cards in a pile

Do you accept debit or credit cards in payment for goods or services? If so, you must get ready for the regulation change that comes into effect on 13 January 2018.

Current rules allow UK businesses to add a small surcharge to bills or invoices to cover card-processing costs. But many consumers have had to pay surcharges out of proportion to their purchase. As a result, there’s been a European-wide directive to remove companies’ ability to charge for card processing.

The new directive passes into law on 13 January 2018, from which date it will be illegal to add surcharges on credit and debit card payments. So consumers buying from a UK-based company will not have to pay processing fees if they choose to pay by debit or credit card.

This regulation will extend across European countries that are part of the EU, as it forms part of a European directive. As it comes into force in January, it will pass into UK law and will still apply after Brexit, unless it is specifically repealed by the UK government.

Are you up to date with your data-protection regulation? Find out more about the General Data Protection Regulation 2018, or read on for more about credit and debit-card processing charges.

What does this mean for Which? Trusted traders?

Making payments

If you buy goods or services using a credit or debit card from a UK or EU-based company, you will no longer be charged a processing fee. This will benefit people making smaller purchases on a credit or debit card, who may have been hit with a surcharge out of proportion to their payment in the past. Travel companies, airlines and ticket companies have all been guilty of adding hefty surcharges to low base costs.

Companies that process high-levels of card payments are likely to be most affected by the change in the regulation. However, consumers may see little difference in prices from companies such as large retailers, because they don’t charge their customers separate card-processing fees. Instead, these businesses typically price any additional charges into the overall cost that customers already pay.

Some companies may increase their prices to cover any potential losses from not being able to cover the costs of card-processing directly from the customer. So it’s possible you may find that costs of supplies increase.

Taking payments

If your customers typically pay via bank transfer or in cash, this will not affect your business much. But if you do accept card payments for goods or services, you must ensure that your customers are not charged a separate card-processing fee from 13 January 2018.

Of course, it’s up to you whether or not you wish to pass on these costs to your customers as part of the overall bill.

More on this…

Tags: Credit card charges Debit card Payment processing

Here are some other articles you might find helpful