From this Saturday, some important changes to rules on credit cards and access to financial information will be implemented across the UK, which could affect thousands of individuals and SMEs.
As of 13 January 2018, the EU Payment Services Directive 2 makes it illegal for any business that accepts card payments to charge customers for paying by personal credit or debit card – both online and physical transactions, as well as applying to public agencies.
Most SMEs that do this will absorb the costs themselves, but some will have to look closely at how they manage the change.
For example, as a public funded body, HMRC is unable to absorb the cost of personal credit card fees as this would ultimately mean charging the fees back to customers through the public purse. From 13 January, the Revenue will therefore no longer accept personal credit card payments, but rather direct debit, Faster Payment, Bacs and CHAPS. The alternative is to use a corporate, business and commercial cards and debit cards which aren’t affected by the new legislation, but beware that you will be subjected to a surcharge if you choose to pay this way.
The latest Voice of Local Shops survey, published by ACS (the Association of Convenience Stores), shows that about 13 per cent of retailers currently surcharge for card payments. Current EU rules prohibit businesses from charging customers more than the costs of offering card payments, but the legislation will now go further by banning surcharging completely, so retailers have to offer the same price regardless of the means of payment.
James Lowman, Chief Executive of the ACS, advises retailers to be prepared: “These rules were introduced mainly to stop excessive card payment charges by online retailers and service providers, but they also apply to shops including convenience stores. Retailers need to be aware of this, and the small minority of retailers who currently charge customers to use cards will have to stop doing this after 13 January.”
Ahead of the changes Mike Cherry of the Federation of Small Businesses says that this is an opportunity for Government to measure the impact on SMEs and the costs levied by operators on them to use their payment method.
For further information about how the changes could affect you and your SME business, contact Steve Govey or your usual Beavis Morgan Partner who will review your position and advise on the best course of action.