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Fees and Surchages for Credit and Debit Card payments to be banned in the UK from today

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438 points · 6 months ago

They'll find a way to get that extra money back.

Original Poster149 points · 6 months ago

No doubt they will in some form or another, I’m just hoping it puts a stop to some of the worst abuses. I’m also sure (as this is based on an EU directive) some company being called out by the EU for pulling that kind of stunt.

Comment deleted6 months ago(5 children)

Bad PR only goes so far, and people have a short memory. Remember when HSBC was caught helping terrorists launder money?

People still bank with them. After they paid a relatively immaterial fine (compared to earnings) and promised they wouldn't do it again.

HSBC again? They were also involved in the Cartel money laundering.

It was terrorists and cartels. They paid a small percentage of their profit as a fine. I'm sure they learned their lesson. /s

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They already have, especially when it's a big chunk of their revenue.

Online takeaway firm adds 50p to all payment forms and rebrands it service charge just days before EU ban on fees for credit card transactions

Just Eat revealed in 2016 that “payment card/admin fee revenue” accounted for about 13% of its total revenue.

Just Eat 50p surcharge branded a rip-off by customers

50 points · 6 months agoGilded1

That's fine. I'll start going back to non paperless requiring you to mail me paper and pay for postage. And i'll send you back a form of payment that requires a real human to process it. Problem solved.

Just eat is a food delivery app. You don't have that option.

I guess you don't order food then. Even easier.

Comment deleted6 months ago(More than 29 children)

I was in a takeaway once when someone tried this. The woman working said "you want to pay by card? Go on fucking just eat!"

Restaurants aren't taking card payment over the phone.

Comment deleted6 months ago(0 children)

One of the reasons takeaways sign up to just eat is so they can take card payements (albeit 3rd party) without a card machine.

That does not make any sense, since I'm sure just eat charges a percent of every order (usually 15%) or a monthly fee, which is probably much higher than just a credit card processing fee (~3%).

that makes sense, as it is probably cheaper than investing in the machine (no idea how much it costs, just guessing).

It was a chipper they don't have the system in place to take a card payment by phone.

Its possible she doesnt have the ability. Izettle for example provide small businesses with the ability to take card quickly and cheaply, but you cannot take payments over the phone. Im sure other vendors are similar.

That would be my guess too.

At least here in Australia, a lot of merchant agreements prohibit taking card payments over the phone.

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Just tested this (without ordering), was the card fee always 50p? So now this is on all card and cash payments and they're making more money before.

Dick move, I use it to quickly order and collect then usually pay by cash, never using them again. As someone else mentioned I'll be using it as a menu then phoning and paying by cash even if delivering.

Unfortunately this isn't going to hurt their bottom line because so many of their orders are generated via weekend hangovers and laziness.

90% of small shops don't even do it anymore and a giant like this is stiffing people.

I swear I've never been charged 50p when paying with android pay before...

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My corner shop says there is a 50p charge and if you accept it, if you bring up the law they say you either pay or you don't get your stuff.

They really don't care unless reported.

Should be mystery shopped and if found doing it, barred from ever running a business, fined out of business, and then given community service.

It's very easy to get people to obey laws if you want, but this government doesn't give a shit.

Exactly. Even have a national hotline where you can report people attempting to charge fees.

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Exactly the same thing with my corner shop...

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I have already seen some online stores add a "service charge" to all orders within the last week.

71 points · 6 months ago

It shouldn't be allowed. The price listed is the price you should pay. I don't care if the supermarket has expenses for heating and cooling. Don't give me a cooling charge when buying milk either.

If they post the service fee in your final total, then technically it is the posted price. It's like shipping and handling. That's not obviously in the price, but it is included in your final total. They just give a service charge to add on top of the shipping and handling.

Then why not include the charge in the listed price and don't include the service charge at all?

Add a pretty penny to all your goods, or 10 if it makes the final price look pretty. You'll make bank and no one will be any wiser.

Then why not include the charge in the listed price and don't include the service charge at all?

Because not everyone uses a method of payment that generates the additional charge?

Which is why I said that they'd be making bank on doing it.

Malicious compliance and all that. It's not your fault, you used to be nice and only charge those who used payments that generated extra costs, but now you can't do that and would need to cover the costs in other ways.

It shouldn't be allowed.

It absolutely should be. Different payment methods have different costs. If you force stores to charge the same for all payment methods, then you are benefiting the more expensive payment methods at the expense of the cheaper ones.

Forcing stores to not charge for card payments just disincentivizes cash payments, and it's a step towards the cashless society that so many people in power dream of.

I don't entirely agree. There may be additional costs associated with transactions rather than each item in the transaction. For example shipping depends on the items selected but depends heavily on each transaction. If it legitimately costs more to use a credit card, why should people paying cash be forced to pay for a service they don't use?

Yes, those are the legitimate reasons why companies are allowed to have a final charge which is more than the sum of the individual items a user selected.

The problems arise when the only methods of payment results in the same surcharge and the surcharge is clearly unrelated to the number of items or price. This could clearly be calculated beforehand and included in the price.

If you haven't experienced such a clear violation of European pricing laws before then I hope you never have to.

It's better to just charge everyone the same to cover overhead.

Also, can you imagine being yelled at by old people because they paid more for the same items as the person who just checked out in front of them?

People will complain one way or another. Go with the one that causes the least hassle overall.

It wouldn't surprise me if the cost of the storage of milk is already accounted for in the price. Unless you're purchasing directly from the producer the price will account for any costs incurred in the transport, storage and sale.

...of course it is. What kind of retarded business model doesn't account for the costs associated with a product?

milk is generally a loss leader.

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Of course the full cost of the product is included in the price, otherwise every single supermarket would go bankrupt eventually.

Hi. I used to manage the produce department in a grocery store. There are actually lots of products in any given department that are sold at or below cost, because it looks good in the flyer and gets customers in the door, whereupon they can be pretty reliably counted upon to also buy high-profit-margin items. The cost of the product is only one consideration in setting the price, and it's not even necessarily the most important consideration.

It's a solid business model.

Razor companies were one of the more known to do it. Razors for cheap or free. Then make their money on replacement blades.

Gaming consoles also used to be sold by the manufacturers under cost, as they cover the loss many times over with games sales.

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I honestly wonder what Ticketmaster will do. Seems like it's 50% of each ticket you buy, the various service charges

Nothing. Service charges aren't illegal. It's adding a credit or debit card surcharge.

Those service charges are there regardless of payment method.

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It is just a way to drive more payments to credit cards instead of cash - which is where the banks make their money off of the service fees paid by the merchants.

Yes, it's cash subsidizing cards. And when it's impossible to avoid the bank charges by using cash, banks can increase the price as much as they want.

5 points · 6 months ago

Yeah. They'll just put the surcharge on everything, not just cards.

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Instant .10 inflation.

Comment deleted6 months ago(8 children)

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Yep. This is so backwards.

They should have instead mandated that the costs of the transaction systems be passed onto the buyers directly. Then people can know how much the merchants were previously "hiding" in their costs and decide if they would rather pay in a way that saves them money.

The US has similar rules to merchants (not laws, credit card company rules) and it has led to an increase in these fees so that the credit card issuers can give you things like "1% cash back". They charge you extra so they can give it back weeks or months later and make you feel like you should be appreciative for how much you "saved".

It's something so yeah.

Everybody is now paying more on some sites and then you get money back for some payments...it is only regulated one way

If "they" are the banks and credit card companies, theyre not losing anything, they still charge the fee to their customers. Its the businesses that use their services that have to deal with this.

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212 points · 6 months ago

Price: $ 110

Discounted price for cash payments: $ 100

This was the exact basis of the case in the US. It was seeing argued that the ban on surcharges was a first amendment question not one of commerce bc the act itself wasn't being regulated but simply the language being used to describe that act be it a discount (for cash) or a surcharge (for credit).

In CA advertising a price as a cash discount is also illegal, but those assholes with gas stations that market with cash price signs have the thing held up in court doing every appeal that nothing is being enforced. The we have a transaction fee for everything, but can has an equivalent discount was also pulled illegal, but was taken up by the same scumbags and added to the case.

The people you are calling scumbags are protecting you against monopolistic practises from the banks.

They could follow what they are allowed to do. They coul give a price and have a discount for cash or list the price of gas and give 10c off a gallon. They don't do that, they advertise a fake price or add on transaction fees you don't know about ahead of time.

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Free pizza delivery!

(Discount for collection.)

I see this all the time on take-out menus that get sent in in mail (in Canada).
Usually Asian restaurants offering like a 10% discount if you come pick it up or pay in cash or something like that.

Yep! Dominos in England has an offer where if you collect a pizza it's buy one get one free!

There's a kebab shop near me that does all sorts of daily deals with discounts if you collect.

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[deleted]
27 points · 6 months ago · edited 6 months ago

My family runs a business in the UK, and it's actually more costly to take cash as payment due to the way banks work now — they charge you to bank it plus you have to faff about with it which costs man hours. It's much cheaper if all your customers pay by card. The charges are just a holdover that have stuck, since, well, they make a business more money.

However it is easier to hold this money and use it day to day and not pay taxes on it. (this is the real reason people prefer cash).

[deleted]
6 points · 6 months ago

If you're self employed yeah, but if you're a business with employees it's redundant.

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However, cash is easier to hide for tax evasion.

Could you elaborate more on how it's costlier for the business to take cash?

Banks charge businesses to deposit cash. HSBC charge (I think) 50p per £100 deposited.

But cards charge 2%

How does that make cash more expensive?

https://www.valuepenguin.com/what-credit-card-processing-fees-costs

My wife and I own a small retail shop (in the US). She works there almost daily, I have a different corporate day-job and work at the shop on weekends. Here are some of the things we have to go through to support cash.

1 - every evening after the shop closes we have to count the cash, comparing it to that day’s receipts for cash sales and subtracting the change we seeded the till with. Not only is it easy for small mistakes to require a recount, it’s easy for there to be a small unaccounted for discrepency (mistake during time of sale, for example). The time this takes is non trivial. We don’t have nearly as much effort going into balancing card transactions because records are electronic and reporting is instant and error free.

2 - We have to separate the cash into two groups... what will be the change for tomorrow’s till and the rest that goes to the bank. Often, we don’t have the correct distribution of small bills and change for tomorrow’s till, so we have to make a list of what’s missing.

3 - Since our shop is in a higher crime area, we are obviously not leaving this cash there overnight. We take it all off site. My wife has to keep one of the employees on staff late with her after closing so she can be safely escorted to her car with the two cash bags.

4 - Later that evening (at home), we separate the cash that is going to the bank into two bags, one for deposits, the other that needs to be exchanged for smaller change to re-seed the till.

5 - all this goes in the safe overnight

6 - the next morning we get up early for a trip to the bank, all that comes out of the safe

7 - We head to the bank to be there when the bank opens... carrying three different bags of cash: one bag is for the till, one bag is the cash we will exchange for smaller bills/change to replenish the till, third bag is for deposit. We wait in line, we get our change, we make our deposit. We drive to the shop.

8 - At the shop, before opening, we seed the till with the two bags of cash... counting the number of each bill and each coin to verify we are starting off with the correct amount.

This all amounts to significant time & effort we have to go through just to deal with cash transactions. And on days when neither my wife nor I can be there to do it, we’re paying trusted employees to do it. Given the choice, we’d prefer not to deal with cash at all. Processing cash causes a measurable expense of time, money, and effort that can be skipped almost entirely for electronic / card transactions.

Sounds like there is room for door-to-door delivery service for small change. You order on the website I need these amount of bills, small change, etc. The company charges $x for this service. They drop off the change during business hours for secure pick-up and everyone is relatively happy.

2 points · 6 months ago

Yeah, its called Brinks

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The man hours of documenting the cash and safely transporting it to the bank.

3 points · 6 months ago

This is for credit cards, most of transactions go through debit cards, they're about £0.20 flat rate.

3 points · 6 months ago

Also Tesco invented cash back, because handling cash is super expensive. They'd rather work as ATM when you shop with a card. Many smaller shops and pubs are doing cash back these days as well.

5 points · 6 months ago

I don't pay 2% on my merchant rates, not even for C/C infact I pay less than 1% on debit card fees in the UK, those figures are flat-out wrong. Also your website is talking about the USA, we're talking UK here.

Ok, but less than .5%?

Everyone is talking about potential additional costs but no one has given me actual data about how it's actually more expensive.

The dude I was replying to literally was calling people too stupid to know it but no one has given me any references.

EU regulations limit credit to 0.3% and debit to 0.2%, both less than 0.5%. Of course, since the UK is leaving, this may change, but for now, yes, credit and debit are both cheaper.

Thank you for being the first person to give me actual facts and not, 'it takes human labor so it's more expensive.'

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Need to pay someone to take that money to a bank. There's risk too, money can be stolen, which can result in insurance costs. Also human error can result in loss in counting change.

A solicitors I know have to have 2 people go when the cash is over a certain amount for insurance purposes. And as the local branch has closed its now about a 5 mile drive to the bank.

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[deleted]
6 points · 6 months ago · edited 6 months ago

I don't know the ins and outs, but it costs money to bank cash. In the UK at least, banks will charge businesses to do it. My family runs a company and say the charges for banking cash work out more expensive than the card charges. I've heard them say several times they'd like to just stop accepting cash payments. However, most customers still think cash is better for business, and so expect a discount if they can pay in cash.

Which makes sense when you think about it, since a card payment is all automated and cash is a physical nuisance.

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3 points · 6 months ago

This is how it works in Brazil.

I'm Brazilian :-)

2 points · 6 months ago

We have rules like that in Poland, and the only places which does that are some online electronics stores, operating on a very little margin. So it's not a real problem.

But I think keeping advertised prices realistic is still worth something.

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Banned in the EU because this is an EU rule the UK is just following.

Of course doesn’t stop the Tories taking the credit https://m.imgur.com/a/g1nRX

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91 points · 6 months ago · edited 6 months ago

Everybody is saying how great this is to "stick it to the banks" but they arent connecting the dots: eliminating fees for paying with cards is actually an incentive to use cards more, which in turn increases revenue from credit card fees from businesses to banks and credit card processors.

At least from the small business standpoint this sucks. It costs those small businesses 2-3% plus a transaction fee just to accept a card. So on small purchases especially a business takes a hit to accept a card instead of cash. A small convenience fee for card use kept the cash price lower. Don't get me wrong, some places charged an unreasonable fee, but in my experience it was usually small.

I assume prices will just increase a bit overall now.

3 points · 6 months ago

Debit card fees are either flat rate £0.20-0.40 or 0.2%-0.4% per transaction depending on service provider. Credit card fees go as low as 0.7%. High fees are a thing of the past, cash is more expensive.

Comment deleted6 months ago(8 children)

Agreed for higher volume businesses.

Ask the person that owns their own coffee shop or retail store and works all of the hours there if they'd rather count their till (which they are still using anyway) with more cash in it or pay the middleman a couple hundred bucks a month in fees.

Comment deleted6 months ago(0 children)

Thing is there are free alternatives like Raiblocks, but these will not stand a chance now that banks 2% now appers "free"

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I recently setup accepting card payments. It was a 1% fee.

That's awesome. I've never seen visa/MasterCard less than about 1.7%. Amex was always 2.5%. Who's your processor, if you don't mind me asking?

Rates go down to 1.4% for businesses with $1m in sales that are in low chargeback industries. The average is 2%. There is no 1% for small businesses.

Yeah, im calling bullshit on that. There must be other costs you are not listing. Do you pay a minimum monthly fee on top of the 1%? Do you pay extra per month to "rent" the machine? Both? If you are telling the truth then where can i find this incredable deal?

4 points · 6 months ago

It does depend on the card. AMEX and Discover are much higher percentages generally. Same with any rewards card - that’s the business paying out those rewards through higher fees - not the credit card companies. And then there’s all the hidden fees. Take a look at your bill at the end of the first month and manually calculate what percentage you’re actually paying with all the fees added it - I’d be willing to bet that you’re paying closer to 3% than 1%.

But if I’m wrong, then sweet baby Jesus. Please tell me who provides your credit card processing!

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It still costs money for the business to process cash. Time spending counting, double counting, storage, transportation etc. Those can end up.being a bit more than 2%

Yeah but then you should count the costs of the card readers, subscription service, upgrades and insurance and also the occasional rogue employee who will use your equipment to commit credit card fraud.

Opposed to the odd rogue employee who commits petty cash theft?

Honestly those costs are minimal compared to labor costs.

Don’t forget the risk of theft, and the cost of insurance to cover said theft. Also, the risk of a cashier accidentally giving too much change, and the time it takes for cashiers to handle cash and coins.

As someone who does the books in a small business I need to point out that most small businesses just don't realize that they have power in negotiations here. You can use a different processing merchant they just hope you don't find that out.

If you are paying 3% + $.10 shop around. Then wait a year and shop around again.

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Well shit, can I claim that 50p charge back that I paid to use my card in the breakfast cafe this morning?

Report them

I hate that.

"50p charge for using card"

Card has been around for like 30 years, hiw is there still a charge!?

Owner is a stingy fuck.

No, the owner isn't a stingy fuck. The owner is charged a smaller percentage, usually between 1.5% and 2.5% every time a customer uses a credit card. Obviously, this charge is going to be passed onto the customer. The only way it wouldn't be is if the overall price of goods goes up - so everyone, even those paying with cash, get to subsidize the cost for those who pay with a credit card.

No business owner, at least any small business owner, is going to eat that processing fee just to appease their customer base. It's not economically viable.

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21 points · 6 months ago

At least in Brazil (where different final prices for different payment methods always existed but were only legalized recently), if I have a store and want to accept cards, I have to buy or rent the card readers, and a third party has to administer the transaction. This third party has costs, employees, taxes to pay, etc. They will not provide their services for free.

So if it costs more for me, I'll surcharge the customer. If I can't, I'll have to share that extra cost with all customers, then cash paying customers would be paying extra for something they're not using.

Now, if banks themselves gave me the card readers for free - I suppose it's cheaper for them to support the readers than to have a human cashier at the bank to receive my cash deposits - then it would save me the trips to the bank, so paying with cards would be cheaper than cash.

The business should be eating the price of it. I don't carry cash with me, so I would most likely never shop at your store if cash was the only option. I also wouldn't shop at your store if you charged me more for using a credit card.

Bless. A business should absorb operational costs? OK, do you want to restrict which costs they have to swallow, or would you prefer that they sell you things at cost. For the couple of weeks it would take for them to go out of business? All that's going to happen is they will take that 1.9%, round it up to 3%, add that to all prices, regardless, and get on with life. Entirely predictable...

You set the price of your items based on what it costs to run your business and make a profit. If you don’t have your pricing set correctly then you are doing something wrong. Are you going to charge me a fee for walking in your building because you have a lease?

9 points · 6 months ago

In the case of credit cards what it means is the people who pay cash are subsidizing those who pay with plastic.

The cost of operations is increased and that cost is spread out over all customers. The customers that cost less are paying extra for those that don't. It isn't about individual products or their costs.

I love it, because it means that cash customers are literally paying me in cash back on my credit card, but is that fair?

2 points · 6 months ago

Cash is more expensive for businesses than cards. It is this way for at least a decade now.

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That's why cash payers find businesses that give them a nice discount for cash as thanks to it not needing to be reported the same way (technically it is illegal but that never stops anyone), meaning the card carriers are paying the cash carriers by way of taxes.

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Yes.

I find that brick and mortar stores tend to cost more than buying online.

Exactly you roll it into your prices, but you don’t charge a fee.

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Are you going to charge me a fee for walking in your building because you have a lease?

Have you ever been in a night club?

Not one that charges a fee. I have bought expensive beers though.

I was kicked out of a bar when I told the bar tender a $10 minimum to accept my card was a violation of his businesses agreement with Visa (policy may have changed since then).

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27 points · 6 months ago

Thanks EU!

But of course; the UK Government try to pass this off as their own legislation, much like all the good EU laws we follow, whilst complaining about the interference...

2 points · 6 months ago

Wait for Brexit to happen and they'll be lobbying the government to reinstate the charges due to 'difficult trading conditions'.

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But not really, to be replaced with a "service charge" for using their website.

This is exactly what JustEat have done. Used to be 50p charge to use your card, now it’s 50p charge on every order

This is a European rule.

Thanks EU???

a positive "thanks"

I didnt realise this was much of a problem, I try not to shop at places that charge for card

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The UK cashless society is around the corner

Easy work around. Add 3% to the price, give 3% rebate to cash. This is how it is done in quebec canada to work around this in some field.

It's nice and all, but I'm assuming there will be adjustments to make up for this unless they've included bans on other options the banks have.

....Remember when your interest rate was 9.99%.... now it's 19.99%.

...remember when you paid your bills online for free... now you're charged a convenience fee for paying "online" (not because you used a credit or debit card).

They pay you for paying by direct debit.

Which is how they charge poor people for paying by cheque or online.

This is one of the reasons I pay my bills in person with cash removed from one bank and driven over to another.

You going to charge me money for stupid services that cost you nothing to provide because a computer does all the work? I am going to make you hire a teller and have her manually count cash in/out of your banks and do paperwork on the transaction.

See how well being a greedy asshole works out for both of us? Now we both have more work to do.

Post the fees and let customers choose. They'll definitely choose to save 1.9%.

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Why should a cash paying customer have to pay for the credit surcharges?

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6 points · 6 months ago

Okay so he's a different perspective, I run a small IT shop and we get a ton of people paying for the smaller stuff on debit card all the time, credit card is much rarer and I normally pass on the same charge that my merchant used to charge (1% or 1.5% I believe). Does this mean I'll have to increase my rate to account for the occasional person buying something by C/C? (Sometimes a new PC can be £500+ and the fees to me would be a few quid), I don't like this :-(

 

Then again, could I just refuse to accept payment via C/C for anything >£100.00?

Well, there goes your credit card rewards....

Right — but of course it’s a pain for your IT company, you don’t have a cashier and register at the front that pumps through 100s of transaction per day. A convenience store does, so of course there is an inflow of cash daily. They are counting and going to the bank anyway! No matter the volume of cash since the cash on hand would continue to grow daily.

That’s all I’m saying - a business that has daily cash transactions will never be in a scenario where they can change all transactions to CC because that’s not the nature of their business. Your IT company can avoid cash inflow. They can’t , therefore , they would want the mix to be mostly cash since the cash fees are SIGNIFICANTLY less than the CC transactions. Especially when the transaction volume is so high at a business like that (think Starbucks or something like that)

1 point · 6 months ago

No, they are not, cash is more expensive.

Cash is not more expensive in small business. And this is where jobs are..at least in the states.

So not only is this legislation benefiting the banks at the expense of the consumers. It's benefiting the big corporations at the expense of small businesses.

And reddit is cheering for it.

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[deleted]
2 points · 6 months ago

Next headline: "Monthly/Yearly Debit and Credit Card Fees Increased in the UK!"

The problem with card fees was never the local chippy charging an extra 50p if you wanted to pay for a single portion of chips using a card, the problem is/was companies like Ticketmaster, airlines and hotel booking sites adding additionl charges of sometimes £5 or more on already large transactions and calling it a processing fee.

What about shops that have minimum spend on a card? Are they clamping down on that bullshit too?

Sadly not and this charge could trigger more smaller places that did not have a minimum spend to implement one.

Merchants pay about 3% more or less when you pay by card. If your business has a 10% profit margin you lost a third just for accepting the card. This hides cost of rewards programs from consumers. Business will have to raise prices on everyone to cover cost of card users.

My fees with world pay are .35% for debit and .75% for credit cards. Im a small business owner. I don't know anyone paying 3%

World pay formerly RBS charges 1.99 % plus .20 cents per transaction up to 3.30 % for reward cards. Plus annual fees and 3 year contracts.

Those who don't have the credit history.

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There are extra fees associated with processing credit cards. They should be able to charge extra for things that cost them extra. As long as the people are made aware of the charges, I don't see a problem.

Visa charges 20p but my corner shop charges me 50p. Some corner shops charge £1 and want a minimum spend of £10, not including cigarettes. I get the 50p. Some cards cost them more than others and the card readers also cost them. But it's the ones that abused the system which made it unavailable for all now.

The tax office already announced they will just not accept credit card payments anymore. Just Eat announced they will charge 50p on all payments to get around the rule. So you can see, the large companies are already finding loop holes.

It would have been fairer to allow small companies, like your local corner shop, to charge a fixed fee for card payments and larger companies who will have a much better agreement with their merchant bank cannot charge it at all anymore.

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Original Poster29 points · 6 months ago

The are fees for handling and banking cash in many situations. The issue here is that companies have been given a very very long time to stop abusing the right to charge a fee and have consistently used such fees to increase profits rather than cover any actual charges.

3 points · 6 months ago

The are fees for handling and banking cash in many situations. The issue here is that companies have been given a very very long time to stop abusing the right to charge a fee and have consistently used such fees to increase profits rather than cover any actual charges.

The problem with that hypothesis is that it is to suggest that there is no competition and that they could be charging even more. If this was just an extra profit then why doesn't the next store down not charge it and get more customers? If people are not as price sensitive as that then should just increase their prices and make more money.

Why not just raise all their prices by 20%? Whatever is keeping them from doing that is also what is keeping them from charging an extra fee that has no value.

Could be sticky prices, could be that a 1-2% price difference isn't enough to attract a significant amount of customers away from established businesses.

5 points · 6 months ago

Then they should raise their prices by 1 or 2%

1 point · 6 months ago

Most of open street market stalls accept cards and even crypto currencies without any fees no matter how much you pay.

This is not a hypothesis, this is reality, some shops just steal money from you for no reason and this law stops that.

1 point · 6 months ago

Most of open street market stalls accept cards and even crypto currencies without any fees no matter how much you pay.

And that is their choice to accept and feel that the extras fees are worth the extra business. There is a good chance that the markup is so high in those cases that any sale is worth so much more than the 1 or 2% they pay.

This is not a hypothesis, this is reality, some shops just steal money from you for no reason and this law stops that.

It isn't for no reason. It isn't stealing money as long as you have a choice to not shop there. People with cash can shop there and you can go somewhere else. In places where the margins are thin they will just increase prices to compensate and that will negatively impact those using cash.

1 more reply

Comment deleted6 months ago(2 children)

Credit cards charge fees just like debit cards, but depending on the card, the fees may be higher. Cards that have rewards like cash back or travel points often have higher fees for the merchant. The credit card company doesn't give those rewards out of their own pocket.

3 points · 6 months ago

Credit card companies also act as an insurer, and hey guess what, insurances cost money.

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5 points · 6 months ago · edited 6 months ago

This is stupid, because a consumer now has no way to choose the cheapest payment method. Instead fees will now be hidden and consumers will choose what is most convenient. This just kills competition and prolongs the retardedly high transaction fees that credit card companies charge.

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So either pay will go down or the prices are going to go up. Companies aren't going to sit by and just eat the loss.

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Businesses will be forced to shift costs to all their customers like the ones who pay with currency. Not really good to govern based on what a tyrannical majority want and interfere with freedom of contract.

banks will always win in the end, design any law you will. the game is rigged in their favour, the cunts.

13 points · 6 months ago

Could be worse. Pay in bitcoin and it’s a $20 charge. Now that’s extortionate.

Comment deleted6 months ago(1 child)

Such moon

5 points · 6 months ago

But by the time the transfer is complete, the value of the bitcoin you've spent could have gone up or down by that much anyway.

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3 points · 6 months ago

banks will always win in the end, design any law you will. the game is rigged in their favour, the cunts.

This law is literally designed to increase bank profits. They don't need to game it, it is by design.

More people will use credit cards if there is no fee for doing so. More credit card use means more credit card fees. Stores will increase their prices slightly so they can give it to the bank.

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[deleted]
1 point · 6 months ago

Clinking on the article gave me a pop up for a President-'s Choice Credit Card.

Ironic.

They can still charge the retailerthe big news is that PayPal is now free in the UK.

Good grief. Imagine if May's government could have managed 2 good things in a week at any other point. In fact, another good thing prior to this week would've been good.

Still, mustn't grumble

I'm not from the UK, but don't you guys have a nationalized/central bank? Why not just nationalize the credit industry too? Those transaction fees could be going to the government

Just because a country has a central bank doesn't mean there's a way to nationalize the "credit industry". So far, the only country that's managed a nationalized debit and credit card network is China (UnionPay is essentially an arm of the Chinese central bank). Canada, however, has a non-profit debit card network, so debit card transactions there only cost a small flat fee (the network itself charges less than C$0.01 per transaction).

Not sure this is a good thing. The HRMC for example will now not accept Credit Card payments which I can imagine will cause a lot of hassle for some people. The charge should have stayed but be capped at the rate the business is charged.

Why is it a % charge?

It's a simple SaaS, it should just be a flat fee per transaction. It's the same amount of work on the credit card and bank systems if the value is £20 or £2000.

The same thing should apply to Uber. It doesn't matter if it's a 10 minute drive or a 1hr drive. It's the same work done by Uber's infrastructure.

1 point · 6 months ago

The Uber driver has larger expenses (gas, etc.) the farther they're driving so that's not really the same thing. Unless you're talking about some surcharge they have, which I don't remember ever being charged unless that's a recent addition.

2 points · 6 months ago

I'm talking about Uber's commission. Uber gets a % of the fare. It should be a flat amount per drop.

1 point · 6 months ago

This is unheard of in many countries in Europe. In Spain (almost) everyone accepts cards, no surcharges and the price shown is always the final one. At most card payments under ten euros is not allowed.

Service Charge

When they put $ they sorta do. But sure freedom of contract. $ means dollars that is what you are telling people.

This doesn't deal with the fundamental issue of credit card companies charging merchants transaction fees for the customers that use cards. Ma and Pa shops are often the ones with signs saying $10 Minimum on Credit Cards (the article mentions this is still in effect) or including a surcharge if not paying in cash because they cannot afford an even more reduced profit.

Something has to change as people use cards instead of hard currency more regularly. The ones who will end up suffering the most from this though are not the massive companies that can take a hit but the small businesses that are already struggling to compete, where raising their prices further pushes customers to online retailers. Businesses don't like their profit being siphoned off due to fees just as much as you can't stand seeing those fees added to an order.

These places don't collect sales tax???

Maybe not illegal. But probably afoul of the UCC and the common law under tender. This has happened before when we switched from the gold standard. Congress would probably need to say cards are legal tender.

Asians on suicide watch now

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