The new legislation, which is a blanket ban proposed by the EU, will mean customers can no longer be penalised for choosing to pay by card, either online or in-store. The new law will survive Brexit because it’s been adopted into UK law.
But businesses are already circumventing the ban by labelling a card charge under a different name. For example, it’s been reported that the delivery company, JustEat, introduced a brand new banking fee for exactly the same amount as their previous card fee but now it will apply even to cash-paying customers!
Whilst, this isn’t in breach of the new legislation as the company isn’t specifically discriminating between cash and card paying customers, I can’t imagine their customer will be too impressed.
And landlords’ agents are up in arms as usual. They would argue that, as a convenience to tenants, they’ve allowed tenants to pay rent by card. For the moment, they can follow the JustEat model and introduce some sort of admin fee – something they are well practised at doing! However, when the new Tenant Fee Ban comes into force (if it ever does) they should be prevented from doing so. I say “should” because we’re still waiting on the final details of the ban.
So is the card payment fee ban good for the consumer? Yes, in principle I think it’s correct. It’s true that businesses can add different charges but at the end of the day it comes down to market forces. Savvy consumers will smoke out the true cost they are paying, so it will come down to competition.
I see it as similar to the argument against the Tenant Fee Ban that says that rents will go up to compensate. They can never go up more than the market will bear. In the end that’s always the acid test.
If you have any questions about the ban or any related matter, Please Contact us and we’ll be delighted to answer.