Government to ban “rip-off” card fees

The Government has announced that from January 2018 “unfair fees” applied to the use of credit and debit card payments will be banned.

Currently, retailers and brands can charge consumers up to an extra 20 percent ‘surcharge’ for purchases made with a credit or debit card or for other services such as Paypal, however, the Government has stated that the “rip-off charges” are not in the interest of shoppers.

The practice is primarily used by small retailers, as well as global airlines, takeaway apps and local councils and government agencies, to cover expensive merchant fees from the card companies and banks, and cost British consumers an estimated 473 million pounds in 2010, according to the Treasury.

The Economic Secretary to the Treasury, Stephen Barclay, said: “Rip-off charges have no place in a modern Britain and that’s why card charging in Britain is about to come to an end.

“This is about fairness and transparency, and so from next year there will be no more nasty surprises for people at the check-out just for using a card. These small charges can really add up and this change will mean shoppers across the country have that bit of extra cash to spend on the things that matter to them.”

The action follows the Government’s cap of the costs that businesses face for processing card payments, and it has added that it will “engage with retailers to assess if there is any more that can be done to help”.

While campaigners have been celebrating the news, some have also commented that the change in law will likely mean that some companies will simply put up their prices, to cover the extra costs they bear with card payments.