End to adding surcharges to card payments in EU will save €550m a year
CONSUMERS will no longer be hit with surcharges for paying by credit or debit card.
The charges had applied on the sale of goods and services such as tickets and top-ups for mobile phones. The add-ons can mean between 20c and 50c extra per €10 transaction.
They are prevalent in online and retail sales, particularly in the travel and hospitality industries.
For example, Ryanair had been imposing a 2pc surcharge on the value of transactions for those who pay by credit card.
But the European Union’s revised Payment Services Directive (PSD2), which comes into effect today, will ban card surcharges, the Department of Finance has confirmed.
The move will mean a merchant will no longer be able to charge extra for accepting a consumer card covered by that regulation.
This will ban surcharges on Visa and Mastercard credit card payments.
A spokesperson for the EU office in Dublin said the new directive would “prohibit surcharging, which are additional charges for payments with consumer credit or debit cards, both in shops or online”.
This is contrary to previous moves in this country not to implement EU-inspired bans on surcharges.
However, some cards not covered by EU rules will still be able to impose surcharges.
These are understood to include Diners Club and American Express cards.
The EU said the surcharge ban will cover some 95pc of all card payments in the EU, and consumers would be able to save more than €550m annually across the bloc.
Dermott Jewell, of the Consumers’ Association, said the move to ban surcharges was long overdue. His organisation has been campaigning on the issue since the 1990s.
He said the government had promised in the past to get rid of the charges, but deadlines for their abolition had been constantly missed.
He accused providers of making millions of euro from the hidden charges.
Mr Jewell said when consumers pay by card the companies save on cash handling, security provision and insurance costs.
Both Aer Lingus and Irish Rail said they no longer impose surcharges. Ryanair said it had now eliminated its 2pc credit card fee.
Ticketmaster said it had no credit or debit card surcharges, but it has other charges.
However, consumer groups fear that the change in the law is likely to mean that some companies will put up their prices, to make up for the loss of charges they impose on card payments.