Credit and debit card charges to be banned as cashless economy grows
From January next year businesses across the UK need to ensure that consumers are no longer being charged extra for paying by debit or credit card, according to new legislation from the Government.
It is thought that in 2010 alone customers spent £473 million on charges from card payments, which is why the Treasury has announced that businesses will no longer be able to add them to their customers’ bills.
The new legislation is part of a directive from the European Union, where a number of member states have already banned surcharges on Visa and MasterCard payments. In the UK the same rules will be extended by the Government to include American Express and PayPal too.
Following the announcement, a number of business groups came out and suggested that in order to incorporate the charges issued by banks for transactions by card, many companies may be forced to increase prices.
However, with more and more consumers going cashless this may not be commercially feasible.
More than half of all payments in the UK were made on a card in 2016, according to the British Retail Consortium (BRC), with many consumers encouraged by big advances in contactless technology.
In fact, it is thought that a third of all card transactions are now contactless, according to The UK Cards Association.
With this in mind, businesses of all sizes are now considering how they can implement card payments into their business, with many traditional tradesman and sole traders paying for mobile card machines.