Will the end of credit and debit card fees mean we all pay more?

From now on, extra charges for people using their credit or debit cards to book flights, cinema tickets, takeaway meals and other goods and services have been banned.

Sunday, 14th January 2018, 10:50 am
Updated Friday, 8th June 2018, 6:33 am
Surchargeing ended at midnight on Friday

The end to what is known as surcharging came into effect at midnight on Friday (January 12), meaning people won’t now be penalised for using plastic to pay for things, either online or in shops.

The additional card fees, often one or two per cent, were more often levied at the end of a transaction, more commonly on credit cards, and have been common practice for years.

It is said to have cost Britons hundreds of millions of pounds a year.

However, although customers are welcoming the move, there are strong indications that businesses will simply raise their prices to compensate for the loss of the revenue.

Other charges are still allowed, and online takeaway company Just Eat has already evoked anger, by apparently introducing a 50p ‘service charge’ to replace its old 50p card payment charge.

Shops and pubs can continue to impose a minimum spend, usually £5 or £10, for customers wanting to pay with plastic.

Some say small businesses will suffer.

Mike Cherry, Federation of Small Businesses national chairman, said on Saturday: “The EU legislation taking effect today represents a double-edge sword for small businesses.

“The proportion of small firms reporting a rise in operating costs is now at a five-year high.

“Removing their freedom to share the burden of card payment fees will give them yet another outgoing to worry about.

“Today’s changes make insisting on payment by cash all the more appealing.

“With access to cash restricted by a rapidly diminishing bank branch network and threats to ATM funding, small firms now find themselves between a rock and a hard place when it comes to customer payments.”

Airline companies can still charge fees for things like booking a seat, while theatres and cinemas can still charge a booking fee.