The Second Payment Services Directive (PSD2) encompasses a wide range of regulation for online payments and financial services across Europe. This article focuses on one specific consequence of PSD2 - the ban on surcharges for payments made by card.
The surcharge ban
The surcharge ban from PSD2 came into effect on January 13th 2018 and covers all businesses within the EEA. It makes it illegal to charge additional fees for payments by debit or credit card. Each country is responsible for their own implementation and scope of the requirements. In the UK the Treasury has also extended the ban to include payment made via PayPal, but generally speaking it covers payment via all major card companies (e.g. Visa, Mastercard, etc.)
What should I do?
If you’re a business within the EEA and you're using Bookwhen to charge additional fees for payments made via your payment gateway, you need to ensure that either:
- You turn this off and stop charging fees to comply with the law. However, there are two possible 'work-arounds' below.
- If you don't accept any other forms of non-card payment (i.e. cash, cheque, bank transfer etc.) then you can continue to charge the fees, as technically you're not discriminating against customers paying by card as all customers are paying the same fee.
- Likewise you're still within the law if you add on a fee to non-card payments you accept, as it means you're not discriminating against card payers - everyone gets the same fee on a transaction regardless of payment method. That would mean adding a fee to cash payments, for example. Unfortunately Bookwhen doesn't currently support the ability to add fees to non-card payments, but we are considering this as a future development. Some large businesses have famously tried this approach, to much frustration from their customers, so please consider how this strategy could affect your reputation first!
To switch off your payment fees on Bookwhen:
- Navigate to your Payment Settings
- Click Edit next to your gateway
- Click Edit and untick the box for ‘Add an online payment fee to bookings?’
Can I increase my ticket prices to compensate?
Yes, if you wish, but you'll never be able to cover the cost of the fee really accurately because of the way payment gateways charge you (flat fee + % per transaction). It's a balancing act between covering your costs and not overcharging customers, on average. Please see our handy spreadsheet here which will help you calculate your new ticket price in the fairest way possible.
If you still have any questions then please just give us a shout!