The travel trade was warned it must prepare for new rules that mean firms will no longer be able to include a surcharge on credit and debit card payments from 2017.
That was the message of Steven Bisoffi, head of card schemes and regulatory affairs at Lloyds Cardnet, who was speaking at accountancy firm MacIntyre Hudson’s summer update in London last night.
For the first time ever this year cards overtook cash as a payment method. In the UK last year more than £600 billion of spending in the ‘merchant sector’ was on cards, with £42bn spent in the travel industry alone.
However, there is new legislation and guidance coming in that will change things radically, according to Bisoffi.
Along with interchange regulation from Europe, which is expected to come into force in December, there is a European wide directive set to come into force in 2017 called the Payment Services Directive (PSD2).
Bisoffi said: “We’ve seen the draft directive and done the analysis on that. The final paper should come out in July.
“At the moment the UK has said thanks but no thanks, but it will come in in 2017. They wanted to enforce it from May this year and the FCA said no.
“Under PSD2, that’s the legal directive that will say no surcharging allowed for all card payments within the scope of the interchange regulation.
“Consumer cards – credit and debit are in the scope of the interchange regulation. On those, post 2017 you will not be allowed to surcharge on any of those transactions.
“Now I’ve actually met and spoken with airlines and others who do surcharge – it’s a massive number at the bottom of their P&L at the end of the year.
“So when I say to them you’re going to have to take that away and make up that somewhere else, that’s a scary number.”
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