Fees for using credit cards will be abolished next year after the government said it would take action against what it termed “rip-off” charges.
Ministers said consumers had handed over nearly £475m in card-use charges since 2010, and it branded the practice was “unfair” – even though its own departments are amongst the worst offenders.
The airline industry is also well-known for imposing these charges. Low-cost carrier Flybe adds a 3% fee (a minimum of £5) for customers paying by credit card, and the likes of Ryanair add a fee, too, although other brands (such as Monarch) have already abolished the practice.
Food-delivery services and small businesses are others that often add card charges, as do home-improvement companies.
The government said that although some industries had acted to absorb the cost instead of passing it on to consumers, the new rules will bring an end to the practice entirely.
Economic secretary to the Treasury Stephen Barclay said: “Rip-off charges have no place in a modern Britain and that’s why card-charging in Britain is about to come to an end.
“This is about fairness and transparency, and so from next year there will be no more nasty surprises for people at the check-out just for using a card.
“These small charges can really add up and this change will mean shoppers across the country have that bit of extra cash to spend on the things that matter to them.”
The move follows an EU directive that bans fees levied on Mastercard and Visa purchases. But the UK government has built on that and will also prohibit charges being imposed for using American Express and Paypal.
There may be some eyebrows raised at Mr Barclay’s use of the phrase “rip-off” charges – some of the biggest offenders are government departments, such as the DVLA, and ministers could have acted years ago to stop their surcharges.
The new rules will apply to these departments and local councils as well as to private companies.