The ‘Blanket Ban’ On Card Payment Charges – What Does This Mean for Berry Smith Clients?

posted by GRichardson

On a daily basis in the UK, consumers are faced with extra fees when paying by credit or debit card for a wide variety of goods and services.  These ‘surcharges’ are often put in place by law firms, ticket providers and companies in many other sectors, to reflect the additional fee which they themselves must pay to the bank each time a client pays by card.  From this Saturday, 13 January 2018, however, all firms and businesses in the UK will no longer be permitted to impose such charges on their clients and customers. 

The new ban will come as a welcome change this weekend for consumers across the country, and is being brought into force in the UK by a new set of Payment Services Regulations, introduced by the Government to comply with EU policy.  The Regulations have an incredibly wide scope and, as a UK-based firm of solicitors, Berry Smith will indeed be following suit by removing the extra charges for all of our individual clients when they pay with their debit or credit card, whether this be over the phone or on-site.

However, despite being widely reported as an ‘absolute’ or ‘blanket’ ban, it is important for all clients to be aware that the ban is designed to protect individual consumers.  It therefore does not cover card payments made using a ‘commercial’ card.  ‘Commercial’ cards, for the purposes of the new regulations, include all company cards, or cards issued to individuals for the sole purpose of covering business expenses.  Corporate clients may therefore still be charged an extra fee when paying for professional services with a company card.  These charges, however, have also been restricted by the new rules to ensure that even commercial clients will be protected from excessive costs.  Our corporate clients can therefore be assured that any surcharge they face for paying with a company card will never exceed the sum that the firm must pay to the bank to process that card payment.

As the new restrictions originate in EU policy, it remains to be seen whether the new ban will survive the effects of Brexit beyond March 2019.  However, for the time being, millions of customers and clients across the UK are set to benefit from not only reduced costs, but also from a fresh certainty that the fees charged to them will be the fees due, no matter which payment method they choose.

Please contact us if you would like more information about the issues raised in this article on 029 20 34 55 11.