One of the biggest credit card companies in the world has welcomed a ban from the United Kingdom that is preventing charges that are being passed on to customers.
Following European directives in the law of the United Kingdom, firms will not be able to pass on the said fees to customers from tomorrow, January 13, 2018. This means that the pesky charges on everything from concerts to plane tickets will soon disappear.
Credit card companies will still make the charges. However, firms big and small will be required to wear the costs themselves.
Robert Glick, the Vice President of American Express, stated: “American Express welcomes the government’s ban on surcharging of consumer payment products, which comes into effect on January 13. This decision will create a level playing field for consumers and will give them the confidence to use the payment method of their choice.”
Richard Humphreys, a regulatory specialist at Blake Morgan, a law firm, said: “Businesses that do not comply not only risk fines and the cost of refunding wrongful surcharges, but also substantial reputational damage.
“While the new regulations are to be welcomed for enhancing consumer protection and security, all businesses will need to consider the financial impact and plan accordingly.”
Removing credit card fees for customers is only a part of a wider overhaul that is scheduled to kick in on the 13th of January.
The new rules come after the implementation of a directive from 2013 that restricted the businesses to only passing on credit card charges at the same rate that they are charged by the likes of Visa and Mastercard.
The changes that will be launched Tomorrow will only apply to companies in the United Kingdom that are selling to customers in the United Kingdom – even though this directive is being implemented across all member states of the European Union.
It will also apply to government agencies and councils, including the Driver and Vehicle Licensing Agency, which charges £2.50 for all its credit card transactions.