News & Views - Savantor

Excessive card charges

Monday, 15 April 2013

There has been a lot in the press about excessive card charges imposed by retailers and finally something seems to be happening on this front. Such charges are imposed by retailers and the worst offenders often then try to pass the blame on to the payment system stating they are only recouping the fees imposed by issuers and/or Visa/MasterCard etc. Clearly this is not the case. The Consumer Rights (Payments Surcharge) Regulations will allow retailers to charge a small amount that reflects the true cost of processing a debit or credit card payment. The Office of Fair Trading (OFT) estimates this at about 2.5% on credit cards and about 50p on debit cards. Some travel firms in particular still seem to be charging a lot more for credit card transactions than the OFT guidelines indicate. I was recently charges £20 by Ryanair for the privilege of using my credit card to book tickets. Money Box has found that a number of travel firms are still charging debit card customers considerable sums too. According to the Office of Fair Trading, UK consumers spent around £300m on payment surcharges in 2010 in the airline sector alone.

A ban on excessive credit and debit card charges has come into force and under the rules traders must ensure that payment surcharges reflect the actual cost of processing the payment. This may explain why tickets for the Rolling Stones concert in Hyde Park on 6 July went on sale on Friday before the new rules came in. The ticket prices were supplemented by a "recorded delivery" surcharge of £19 and a further "delivery charge" of £5.50 per order!

The most notable cases of excessive charges have occurred when consumers book flights or theatre and cinema tickets. But the ban will cover all industries, including local councils and the DVLA – who have imposed these charges in the past. Which? said that in order for the ban to be effective there must be a tough enforcement regime and companies must play fair and not pass costs on to customers in other ways which are nice words but will probably only result in companies blaming security processes, IT development costs etc for maintaining the fees.

Savantor Services

Savantor Services

Savantor services are tailored to Client needs based on our core service areas

Specialist Resourcing Payments Strategy Platform Transition Operational Efficiency
Savantor Services

Job Opportunities

Consulting and contracting roles in the payments, mobile and banking arena within the UK and across Europe

View more
Savantor Services

Savantor Views

Find out more from our Savantor brochures, MarketEye back copies and Industry opinion

Collateral Market Eye News & Views Sign Up to receive MarketEye

Client Quotes

Acquirer Strategy and Operating Model

"Savantor brought an effective blend of European acquirer market expertise and transaction processing solution design. Their experts quickly forged strong working relationships with our team. We enjoyed working with them to create our future acquirer strategy."

Mikko Hyttinen, SVP - Lending Services - OP-Pohjola Group - Finland

Platform Selection

"Savantor's support in our platform selection process has enabled us to sustain our profitability and positioning for the future. Their advice and guidance was essential to our decision-making."

Robert Lambert, Head of Cards Strategy - Permanent tsb bank - Ireland

Interchange Review

"Savantor did a superb job in confirming what we believed was an area of weakness. The detail we now have will enable us to agree internally what we need to do to improve structure, control and income. Nationwide management were very impressed with the quality of the Savantor team."

Adam Slater, Senior Manager - Banking - Nationwide Building Society - UK

Expert Witness

"After searching extensively for the required industry expert in a complex litigation, Savantor was identified to have the necessary industry knowledge and expertise on a range of complex issues. Savantor provided clear advice and was able to quickly hone in on the key issues, but most importantly, generating pragmatic winnable answers."

Gavin Ingram, General Counsel & VP Strategic Planning - Global Blue - Asia Pacific

EMV Migration Planning

"It was a strategic imperative for the bank to be EMV compliant for our payment cards and the experience that Savantor brought to the company has proved to be invaluable."

Eddie Sweeney, Chief Technology Officer - AIB Bank - Ireland

Credit Card Launch

"Savantor's knowledge and experience were the key differentiators in selecting them and they contributed greatly to the success of the product launch and the effectiveness of the ongoing operational service."

Toine Schepers, Operations Director - Primeline - The Netherlands

Moneris Solutions

"Savantor did an outstanding job of the review and I received nothing but positive feedback on the interaction with our management team."

Jeff Guthri, COO - Moneris Solutions - Canada

New Payments Initiative

"In moving our new initiative into reality, we required specialist payments knowledge and forward thinking in the retail sector. Savantor supplied this and provided very effective guidance throughout. We enjoyed working with them."

Sophie High, Head of Innovation Delivery - Cancer Research UK

Clients - Request Support

Send us a support request and one of our specialists will be in contact to assist you.

Consultants – Upload your CV

Register your CV with us and gain access to a range of job opportunities through our online job search portal.