madfish

BBC is reporting that UK credit card fees are to be scrapped from January. Wonder what, if any, impact will be on BA?

http://www.bbc.co.uk/news/business-40648641

Consumers are no longer to be charged extra for paying by debit or credit card, the government has said.

From January next year, businesses will not be allowed to add any surcharges for card payments.

The worst offenders currently are airlines and food delivery apps, and small businesses which typically add a fee for cards.

In 2010 alone consumers spent £473m on such charges, according to estimates by the Treasury.

It follows a directive from the European Union, which bans surcharges on Visa and Mastercard payments.

However the government has gone further than the directive, by also banning charges on American Express and Paypal too.

Campaigners welcomed the move, saying it was great news for consumers.Take-aways

At the moment those booking airline tickets with credit cards pay an extra 3% with Flybe, with a minimum payment of £5.

Customers of Ryanair and Norwegian pay 2%.

However Flybe has already promised to get rid of the minimum payment, and cut its charges.

Ryanair said it would comply with any changes in the law.

irishguy28

The impact will be cofveve.

(But not as bad as the May bank holiday meltdown!)

mikeyfly

I think the impact will be seen by the consumer on the credit card provider's offers and rewards

These could be quite significant

rossmacd

I no longer have to 'live' in Germany

ahmetdouas

Excellent news. Long overdue.

cammyloon

I'd thought the Government might have allowed retailers to recover direct costs to them for payment by card. But if no surcharges are allowed at all, I guess the biggest short-term impact will be a reduction in the number of retailers allowing payment by Amex.

V10

Fares will inevitably increase to compensate.

T8191

Booking with BA [flight + hotel] a couple of weeks ago ...
"The price of your ticket includes a credit card surcharge of £ 40.00, a security and insurance surcharge and a carrier imposed charge per sector levied by the carrier. ..."

I understand that's the maximum BA charges for using a CC, but it was still bloody annoying. I have no doubt, as others have surmised, that BA will feed that back into something else obscure, opaque and unjustifiable

nbevan

I assume that BA prices will go up by 1%, which you can no longer save by using a debit card

Tobias-UK

No. It will have no impact on that whatever.

V10

That's the thing - the current setup is wholly opaque with the costs to businesses of processing credit card transactions not really being in the public domain, so consumers have no way of knowing if what they pay in surcharges is inline with this or if extra profit is just being added on top.

However the notion that this will be absorbed by businesses is pure pie in the sky and the costs will still be passed on in the headline fare in this case paid by consumers.

Deltus

This is what I'm worried about - BA (and everyone else) could just stop accepting credit cards at all. Not sure the EU has thought this through...

Foltan

But that's fine, because then you're in a position to compare different businesses/airlines etc by the flat cost of what they're providing. That's the whole reason for preventing companies from levying these fees.

Tobias-UK

As will many other businesses who have been making a charge for the use of credit cards.

madfish

Fat fingers! Now corrected 😀