From 6th April 2014, businesses are no longer able to add excessive charges for using credit and debit cards. Whilst this is aimed at larger companies, like airlines, small businesses need to take note. Taking card payments can be beneficial for all kinds of businesses, giving customers a convenient and secure way to pay, but it is not without its costs. Under new rules, effective from this month, businesses will only be able to charge the customer the amount it costs them to process the payment and no more.
They will no longer be able to make a profit by charging the consumer for credit or debit card use. Whilst this loophole has mainly been closed in response to large companies – most famously airlines – that charge over the odds for credit and debit card payments, this is a potential change that all business owners need to be aware of. It's also useful to know from the point of view of a business consumer, to make sure your company is not unnecessarily ripped off. Not only are the new rules expected to help consumers be more aware of the level of costs they are committing to, but that businesses, including SMEs, that treat consumers fairly will not be disadvantaged by those who use less transparent practices to lure consumers towards less competitive offers.
The Department of Business, Innovation and Skills has published guidance, which sets out the kind of costs businesses incur that they are legitimately able to claim back through payment surcharging, to help them comply with the new legislation.
From 6th April 2014, businesses are no longer be able to add excessive charges for using credit and debit cards. Whilst this is aimed at larger companies, like airlines, small businesses need to take note.