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Changes to credit/debit card surcharges in 2018

From 13 January 2018, businesses will no longer be allowed to charge consumers extra for paying by debit or credit card. This is according to the European Commission’s new Payment Services Directive (PSD2), which prohibits surcharges on Visa and Mastercard consumer payments. The PSD2 provisions will remain post-Brexit, as they have already been written into UK law in the form of changes to the Consumer Rights (Payment Surcharges) Regulations 2012.

Amendments have been made to the UK Consumer Rights (Payment Surcharges) Regulations 2012 to implement the PSD2 provisions on surcharging. The UK has extended the ban on surcharging to all consumer payment instruments, including for example, American Express transactions and other methods of payment such as PayPal.

It will still be legal for small businesses to impose a minimum spend.

The new rules will apply to all payments made in person and online by consumer credit and debit card, including smartphone payments (Apple Pay/Android Pay/Samsung Pay); This means that online retailers will no longer be able to include additional charges upon checkout to consumers. They also cover credit transfers and direct debits. However, they won’t cover ATM withdrawals or transactions made using “commercial cards” such as corporate credit cards, or any methods designed solely to pay business expenses. Where surcharging remains permitted, the charges must be reasonable and in line with the actual costs incurred by the business.

Local Trading Standards officials will be tasked with tracking down any organisations continuing to charge consumers extra after 13 January 2018.

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