Written by: Keith Tully
Published: 22nd January 2018
The recently introduced ban on surcharges associated with credit card or debit card payments could see a growing number of SMEs switching to cash only policies in the coming weeks.
The ban came into effect in mid-January in response to an EU directive on the matter and means that businesses can no longer issue their customers with extra charges to cover the cost of processing a card payment.
However, some businesses could be looking to find ways in which they might avoid having to meet the cost of processing card payments themselves.
The apparent aim of banning card payment surcharges, both in stores and online, was to bring benefits to shoppers and consumers but it could be that some will soon find themselves unable to make card payments in as many stores or situations as has previously been the case.
There are also concerns in some quarters that the costs associated with processing card payments will gradually be incorporated into the prices of goods and services being sold by SMEs around the country.
It is already common to see small businesses insisting on £5 or £10 minimum limits on card payments and that practice could become considerably more widespread in the coming months.
In recent weeks, the Association of Convenience Stores (ACS) has been urging its members to get their policies in line with the new laws on card payment surcharges, which came into effect on January 13th.
According to the ACS, around 13 per cent of its members across the UK had been adding surcharges to their customers’ card payments, while an estimated 33 per cent have minimum spend limits on card payments and around 8 per cent already do not accept card payments at all.
The ACS’ chief executive James Lowman has said that the EU’s Payment Services Directive (PSD2), which led to the recent rule changes in the UK, were “introduced mainly to stop excessive card payment charges by online retailers and service providers”.
However, Mr Lowman noted that the rule change will certainly impact most of his organisation’s members along with many other small and medium-sized businesses throughout the country.
13th January 2021
Retailers in the UK endured what was statistically their worst year on record in terms of sales growth during 2020.Read More
11th January 2021
As many as 250,000 small firms could close this year unless government action is taken to prevent such a scenario from happening.Read More