Britain will stop companies ranging from takeaway food apps to airlines from charging an extra fee to consumers who want to use credit cards and other payment services, the finance ministry said on Wednesday. Kate King reports.
It takes little more than a second, but often seems like you're being charged by the hour. Now Britain's Finance Ministry is cracking down on what it calls 'rip off' fees faced by consumers who use credit cards to pay. SOUNDBITE (English) HEAD OF FX STRATEGY AT CIBC, JEREMY STRETCH, SAYING "I think the first instance it's good news for the consumer because of course those rip off fees will be removed. It doesn't necessarily impact the card issuers. But I think it's more about those companies that we as customers have been paying these surcharges to and how they adapt to try and change their pricing models." From airlines to the local corner shop - surcharge fees are common practice for thousands of retailers. It's also been a money-maker for government departments. It's estimated that in 2010 the extra charges raked in as much as 473 million pounds. Under the changes due to come into effect in 2018, the fees will be eliminated for those using American Express, Paypal and Apple Pay. That's on top of a EU requirement to wipe the charge for Visa and Mastercard. But analysts say it may not be a win win for consumers. SOUNDBITE (English) HEAD OF FX STRATEGY AT CIBC, JEREMY STRETCH, SAYING "I think it is going to be a case of those that have been raising revenue from this particular process will ultimately find their revenue streams compromised. The question is whether those companies who are providing us with services, whether it be government inspired or otherwise, increase their prices accordingly to try and claw back the costs." Britain's prime minister says its all part of making life easier for households which at the moment are crippled by stagnant wages and rising inflation. A little bit of extra cash, plastic or not, could go a long way.