When a senior treasury spokesman says bluntly that “rip-off charges have no place in modern Britain”, the only doubt he leaves is why it has taken so long to identify and deal with the gratuitous levies on credit or debit card payments.
Like that other great scam, the booking fee, where a transaction fee is demanded even when paying full price by cash, in person, at the box office, the credit card charge has gone unchecked for too long.
The charge is supposed to compensate for the cost of processing a card payment, which is real, and is a significant issue for small traders. However, many of these outlets are upfront about what is generally a modest sum, which is charged only for card transactions below, for instance, £5.
But elsewhere, at bigger concerns, there is no transparency to demonstrate that what the consumer pays correlates to the cost incurred by the company involved. As the credit or debit card became an increasingly popular method of payment, the associated charge became a universal mark-up, abused by companies seeking to increase their profit margin. And while that practice has been restricted in recent years, there was still evidence of varying levels of surcharge which suggested that more than just the cost of processing was being collected.
The consumer has been at the mercy of companies who have demanded transaction fees, because we have been encouraged to become an increasingly cash-free society, paying by card on the high street and of course online. It is unfair to then ask the consumer to stump up for the running costs of a system that offers retailers greater efficiency than ever before. How would those retailers feel about going back to depositing cheques, or bags of hard cash to the on-street nightsafe?
But as we welcome the announcement by the UK government that card charges will be abolished, it should be pointed out that the measure is the result of an EU directive. And when Stephen Barclay, Economic Secretary to the Treasury, preaches “fairness and transparency” and promises “no more nasty surprises”, let it not escape anyone’s notice that HMRC, a public agency, levies a charge on those who pay their tax bill by credit card.
Consumers can look forward to saying a not-so-fond farewell to the charge. Perhaps the box office booking fee could be encouraged to follow it out of the door.