Charges to use debit card
Discussion
Is this right? Gone through the whole Q&A life story thing over the phone with Cornmarket Insurance (IAM Surety) for my motorbike insurance. It gets to payment and I'm asked credit or debit card? I say credit, they say 3% extra. No problem, expected it but thought I'd try anyway. Debit card instead then please. £1 charge. Oh. Wasn't expecting that, never heard of a debit card surcharge before. Argue the toss but don't get anywhere, unavoidable apparently.
I didn't think this was allowed. That is, "drip-pricing", particularly as one charge or another is unavoidable (unless I visit their office with cash I suppose).
I didn't think this was allowed. That is, "drip-pricing", particularly as one charge or another is unavoidable (unless I visit their office with cash I suppose).
I was chatting to an independent car dealer this week who told me he prefers debit cards because there's a flat fee of 22p per transaction from his provider. Credit cards are a few percent (he won't accept them for any significant sum for that reason) but even cash costs him 70p per £100 to bank.
I completely get that there are costs for a business associated with processing payments. And as I understand it, credit cards have always cost significantly more than the alternatives, so I accept that if I want to do business with a seller that decides to charge extra, then I could choose to use another payment method, where there is no additional charge.
What I find a little galling in this instance is the fact that whichever payment method I choose, there is an extra charge. I asked what payment options there were that didn't incur an extra charge and they told me there weren't any. I thought this sort of thing had been banned after a stink had been kicked up about buying concert tickets and the like online; unavoidable booking fees here, delivery fees there etc.
What I find a little galling in this instance is the fact that whichever payment method I choose, there is an extra charge. I asked what payment options there were that didn't incur an extra charge and they told me there weren't any. I thought this sort of thing had been banned after a stink had been kicked up about buying concert tickets and the like online; unavoidable booking fees here, delivery fees there etc.
DudleySquires said:
I thought this sort of thing had been banned after a stink had been kicked up about buying concert tickets and the like online; unavoidable booking fees here, delivery fees there etc.
It's not that that should be a fee-free option, the problem was the airlines were widely advertising prices (eg. in newspapers) but there wasn't a way to every buy at those prices.bad company said:
I had similar with car insurance so sent a cheque.
Remarkably I have to do this with a pension provider. There is never enough cash to pay charges and they want £50 to set up a DD so I send them quarterly cheques with a covering letter. It is quite fantastic. I'm not an early adopter by any means, but this is Dickensian.Simpo Two said:
Remarkably I have to do this with a pension provider. There is never enough cash to pay charges and they want £50 to set up a DD so I send them quarterly cheques with a covering letter. It is quite fantastic. I'm not an early adopter by any means, but this is Dickensian.
Madness, it must cost them to process the cheque. £50 to process a dd is outrageous.I have always declined to pay debit or credit card charges. The suppliers usually back down.
The way retailers are charged for debit cards is changing... currently it is a flat fee, around 20p per transaction. This is fine for us as our transactions are regularly £100+, so the 22p is inconsequential. At the sharp end, more and more people are paying by card even for low value items, and this has increased with the roll out of contactless. So for WH Smith selling a 50p newspaper via a self service till and the customer paying by contactless, they're probably losing money.
Visa Debit/ Mastercard Maestro are both going to a %age per transaction this year like credit cards. Great for newsagents who can accept cards with less cost, worse for people like us and garages with high value transactions. While most retailers will build the cost into the product, there will be those who add on the one or two percent.
But then in October the EU bill comes in which limits the fees retailers pay per transaction to 0.3% for credit cards and 0.2% for debit cards - which should once again render them inconsequential, and mean they don't have to pass the costs on to consumers.
Visa Debit/ Mastercard Maestro are both going to a %age per transaction this year like credit cards. Great for newsagents who can accept cards with less cost, worse for people like us and garages with high value transactions. While most retailers will build the cost into the product, there will be those who add on the one or two percent.
But then in October the EU bill comes in which limits the fees retailers pay per transaction to 0.3% for credit cards and 0.2% for debit cards - which should once again render them inconsequential, and mean they don't have to pass the costs on to consumers.
Rick101 said:
I look forward to seeing retailers drop their charges as a result.
It probably won't make any difference to prices at a retail level, but it should do away with the 'minimum spend' at point of sale for card transactions, and things like that.Also the online people who charge the 'admin' fee will be under greater pressure to reduce or scrap these.
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