New bank card charge rules set to have ‘significant impact’, warns Abta

New bank card charge rules set to have ‘significant impact’, warns Abta

Most credit and debit card charges will be prohibited from 2018 as part of law changes from Brussels.

The EU’s Payment Services Directive will come into effect on January 13, 2018, stopping businesses charging for the vast majority of consumer credit and debit card payments, according to Abta.

It has been illegal for companies to pass on card charges to customers which are higher than those charged by their banks since April 2013.

This was due to an EU directive, but it was only the first stage in changes in this area. The EU then reduced interchange fees and the new directive is now due to come into force next year, according to Abta chief executive Mark Tanzer.

He warned that the new rules will have a “significant impact” on travel businesses.

“You may choose to deal with these extra costs by increasing headline prices or, if you are an agent, by charging a booking fee,” he said.

“If you choose to charge a booking fee, so as not to breach the terms of the directive, it must be on all bookings, not just those where payment is taken by card.”

In an update to members on credit and debit card charges, Tanzer said: “The government is working on implementing this into UK law. It will definitely impose the ban on charges for MasterCard and Visa credit and debit card payments.

“It is currently consulting on other issues, including a proposal to extend the ban to charge cards such as Amex and Diners.”

Abta will “strongly oppose” an extension to these card types, he stressed.

“We will be issuing a guidance note once the government has released the results of its consultation,” Tanzer added.

“Abta worked closely with our European trade association Ectaa to highlight the negative impact of a ban on card charges on the travel industry.

“In common with most consumer legislation, it can be very difficult to get the EU to overturn any legislation that they view as beneficial for consumers.

“Although we were not able to overturn the ban, we did manage to maintain the right for businesses to refuse card payments, or to encourage customers to use other methods of payment available.

“I would encourage members to continue to shop around when selecting merchant acquirers to obtain the best rates and look on the Abta Partners section of where you will find merchant services providers who offer preferential rates to Abta members.

“We have been explaining this issue and discussing a range of options for members at our regional meetings and members who require further guidance should feel free to contact the association.”


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