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Card surcharging outlawed: What it means for retailers


Adding a surcharge when customers pay using a credit or debit cards is no longer permitted. Most retailers won’t have ever charged a fee so won’t be affected, as they have chosen to always absorb the cost for accepting card payments.

The biggest sectors to be affected will be hospitality, travel and airlines etc. However, if you have been surcharging then you will need to make a call on how you take on the cost, whether you take a hit on your margin or increase your costs. How retailers run their businesses is absolutely their decision but bira warns retailers that by increasing their costs or adding an additional charge like a ‘service-charge’ as seen by Just Eat, they risk their customers voting with their feet.

EU Fee Regulation (IFR) on Interchange Fees, which was introduced by the Government in 2016, worked to cap some of the fees retailers were being charged for handling credit and debit cards (a saving to the sector of some £500m). However, this has been constantly eroded in the last 12 months by the schemes (Mastercard and Visa) introducing creeping and insidious fees for processing credit and debit cards to recoup their losses following the interchange regulation. This is the real issue for the retail sector.

bira is therefore working to encourage the Government to influence the Payments Systems Regulator to address the recent surge in card scheme fees that all retailers are seeing for processing card transactions.

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