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whitesands1

EU (&UK) Ban on Consumer Credit Card Charges.

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I just heard about this on the radio, and there are some really good references that I found after a cursory Google search, links are below.

From today a business can no longer lawfully charge consumers paying by Debit, Credit or Charge card more.

There could be many unintended consequences from this directive - most of which will hit the consumer.

High card usage retailers, fuel, groceries, paypal. amazon already have the card processing fees absorbed into their pricing structure so no benefit for the consumer here.

The high growth business Just Eat, had a card payment surcharge of 50p per order, which will now be replace by a 50p per order service charge, for all payment options.

HMRC will no longer accept Credit card payments - very transparent and up front in my opinion.

DVLA will no longer charge the £2.50 Credit card surcharge, with the resultant income shortfall estimated at £8.5m. (I'd imagine their processing costs will now escalate too as many more people will pay by Credit card).

Of relevance to Silver Forum Members, Chards has been very clear on its position and will now cease accepting Credit card payments.

Inflation has already got a grip,  I can't think of a time where there have been so many and so large bubbles building (quietly, unnoticed, deliberately concealed) at the same time the economic squeeze on incomes seems to be biting harder. 

Will consumers find price increases acceptable? - Can businesses absorb yet another cost pressure? - because the easy way out here is to raise prices across the board.

Are consumers strong enough to stop being taken for granted by the big firms? 

Will card processers lower their charges now that there will be more transactions and an economy of scale?

Or will we all end up paying more.........

https://www.theguardian.com/money/2018/jan/13/credit-card-surcharge-debit-ban

https://www.moneysavingexpert.com/news/cards/2017/07/credit-debit-card-fees-to-be-banned

https://www.chards.co.uk/blog/were-saying-no-to-bullion-by-credit-card/107

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Forgot about this happening, thought i might be reversed.  Its a disappointing change and done for the wrong reasons.  We all pay processing fees and dont see them normally, the only reason this comes in due to a few being excessive, or adding the charge to low headline prices when other options weren't available.  Previously with some places i could chose to pay by card or cash/transfer and see a saving or pay for convenience.  Now i wont be able to chose and prices rise 3.5% instead.  Due to the vast majority of sales absorbing card fees into prices it wont have a major impact, but its annoying all the same.  They could instead have legislated for the fee to be limited to what was charged by the processor, or companies to publish the full cost where its only option (thinking air fare in particular here, they should price in main costs then offer discounts for no luggage etc.)

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Bring on Brexit - another unwanted EU directive affecting our daily lives and choices.

Retailers accepting credit card payments should be permitted to pass on their fees applied by the banks for accepting this facility.
Accepting credit cards incurs a fee which is negotiated between the retailer and the card payment provider.
The consumer has a choice and if choosing to pay with a credit card then what is wrong in charging a fair fee ?
When Chards say fees range from 2 - 5% then let's ignore the 5% fee as misleading.
No good retailer will be charged 5% by the banks and if they are then either they are likely deemed a higher risk business or they haven't done their homework with regard to commercial fees.
If certain cards like Amex apply higher fees than Visa and MasterCard then simply don't accept that type of card ( no doubt someone in Brussels will object ).

Many cards provide the owner a cash-back ranging between 0.5% and 2% so when paying a bill using your credit card ( fee charged to the retailer ) and no surcharge on the bill then effectively the buyer is getting a discount which has been charged effectively to the retailer. Paying for a holiday with a credit card provides a lot of benefits should the holiday provider go bust etc. so kind of insurance and is the recommended way to pay for many transactions for this assurance. Any business that previously charged a fee and has a lot of credit card transactions will simply increase their prices to everyone but let's not panic about the rise - in most cases 1 or 2% will not be noticed in the grand scale of things.

 

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Like most monopolies, the credit card companies charged excessive fees to retailers and used these fees to subsidise cashback cards, cheap balance transfers (aka loans) etc. This encouraged people to develop bad habits and get into debt. Over the years credit cards have been a source of misery for millions of people.
I realise for the savvy person, these cards have been a source of convenience, discounts and essentially free cash. I have played the game myself.
However, IMO, fees in general need to come down and if this directive helps that, I'm fully in favour. It's not often I have been able to say that about something emanating from Brussels.

 

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I am not working today due to heavy snow, so I took the opportunity to order some oil for our heating system as the prices are a wee bit lower and also we need the oil!

I noted that there was a good headline price on an Oil purchasing comparison site and at the final stage of the order a £2.99 Service Charge - to "help run the platform and allow us to offer services like our outstanding seven days a week customer support."

Now the world is full of 80:20 rules, and I am certain that there is only a small % of customers to whom £2.99 would be material, but I noticed this was the first time I'd seen this charge.

It is a shame to have lost this business because of a charge that was hidden till the very last minute.  I am lucky to have the time to invest to shop around.

More people will be voting with their feet as the squeeze on incomes continue.  Those who do shop around might find that they lose trust with businesses who do not have the most transparent pricing and standards.

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