Surcharge (payment systems)

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A surcharge, also known as checkout fee, is an extra fee charged by a merchant when receiving a payment by cheque, credit card, charge card or debit card (but not cash) which at least covers the cost to the merchant of accepting that means of payment, such as the merchant service fee imposed by a credit card company.[1]

A surcharge may be prohibited by card issuers, such as Visa and MasterCard, but the enforcement of the prohibition is not uniform. Some jurisdictions have laws which require, allow, regulate or prohibit a merchant imposing a surcharge. If no surcharge is permitted, the merchant's costs are borne by the merchant, who may incorporate the burden in its prices. When a customer pays with cash, the merchant may offer a discount.

Regulation of surcharge[edit]

European Union[edit]

Surcharges are permitted in the European Union but, in March 2015, the European Parliament voted to cap interchange fees to 0.3% for credit cards and to 0.2% for debit cards.[2]

United Kingdom[edit]

In the United Kingdom, the Consumer Rights (Payment Surcharges) Regulations 2012 limit payment surcharges with some exceptions. Payments for the supply of water, gas and electricity are regulated but payments for calls from public telephones are not regulated.[3]

Germany[edit]

Surcharges are generally permitted by German law as long as the surcharge does not exceed the costs borne by the merchant for the use of the service.[4]

Some German cities such as Berlin and Düsseldorf have adopted taxi fare bylaws with provisions for mandatory surcharging of credit card payments. In the Berlin case, a fixed per-transaction fee of EUR 1.50 has been criticised by authors as disproportionate.[5]

Switzerland[edit]

The Federal Competition Commission has recently allowed payment schemes to ban surcharging in Switzerland through their standard contract terms.[6]

See also[edit]

References[edit]

  1. ^ What is a Credit Card Surcharge?
  2. ^ Commission welcomes European Parliament vote to cap interchange fees and improve competition for card-based payments
  3. ^ http://www.legislation.gov.uk/uksi/2012/3110/pdfs/uksi_20123110_en.pdf
  4. ^ Section 312a(4) of the Civil Code.
  5. ^ Yang, Maximilian (September 1, 2016). "Card Payments and Consumer Protection in Germany" (PDF). Anglo-German Law Journal. , p. 23
  6. ^ Wettbewerbskommission, https://www.weko.admin.ch/dam/weko/de/dokumente/2015/03/kreditkarten_domestischeinterchangefeeiikkdmifverfuegungvom1deze.pdf, p. 44