Additional charges no longer apply to credit card transactions

Consumer group voices warning about businesses increasing prices

New rules will provide more protection to consumers paying for goods and services with credit cards. Photograph: Getty

New rules will provide more protection to consumers paying for goods and services with credit cards. Photograph: Getty

 

As of today, businesses can no longer add an additional charge to a customer’s order when they pay by debit or credit card.

Surcharges were commonly used by airlines, fast-food websites, ticketing websites and travel companies. They cost EU consumers an estimated €550 million a year although the charges were not always a true reflection of how much the card transaction cost to process.

The ban applies across Europe. The UK’s Consumer Council said fears have been raised that businesses will increase prices to recoup their costs elsewhere.

“Already there is evidence of some companies replacing the card surcharge with a ‘service charge’,” said the Consumer Council. “ We may also see more businesses impose a minimum spending limit, or a refusal of card payments altogether.

“However, in spite of these fears, we believe the ban is a positive move as prices should become more transparent, making shopping around and price comparison easier for consumers.”

The new rules will:

--Prohibit surcharging, which are additional charges for payments with consumer credit or debit cards, both in shops or online.

--Open the EU payment market to companies offering payment services, based on them gaining access to information about the payment account.

--Introduce strict security requirements for electronic payments and for the protection of consumers’ financial data.

--Enhance consumers’ rights in numerous areas. These include reducing the liability for non-authorised payments and introducing an unconditional (“no questions asked”) refund right for direct debits in euro.