You may have heard but from the 13th January this year companies can no longer charge you a percentage of your payment for paying by credit card or debit card. This is an EU ruling which won’t be overturned after Brexit.
You can read more about it here: Credit card surcharges
At Revolution we used to charge a levy on credit cards for service charge because this is what the credit card merchant charges Revolution for taking the payment. Lots of companies followed a similar process but some (as is life) used this process to increase their profits and not pass the charge at cost back to the customer.
These charges made by the merchant are not going away, all companies will still be charged for accepting a payment by credit card but can no longer pass this to the customer as done previously.
There are a few solutions available to Revolution and all other companies:
- Charge a fixed price admin fee for all payments made (cash, cheque, debit, credit, etc).
- Increase prices to cover the costs of not being able to recharge the fee back to the specific customer.
- Not take credit cards.
As an insight, on a payment for service charge of £1,000 we were charged £30 by the merchant. We take payments on behalf of the buildings we manage as the funds are theirs and not ours. There is no legal mechanism for buildings to absorb these costs as it would be unfair on other owners to subsidise.
As part of our transparent ethos we do not see it as acceptable to charge people for making payments by cheque, bank transfer or debit cards. This just seems to penalise everyone to allow a few to pay by credit card. We also don’t see it as being fair to increase our charge to the buildings as this penalises everyone again for the few.
Less than 5% of our base has historically used credit cards and as such we have sadly made the decision that from the 13th of January we won’t accept payments by credit cards. Debit cards will be fine as we have always stood the cost of these transactions.
We will see how this pans out over the coming 12 months. We’re sure there will be some creative attempts at getting around the ban by other companies, but not in Revolution’s case.
Feel from to contact us with any queries.