For years, it has been a common practice for taxis to charge extra for paying by card. As of January 13, 2018, this additional charge becomes a thing of the past.
New Law to Ban Additional Charge for Card Payment
The new rule, effective throughout EU, means that businesses can no longer add an additional charge to cost of goods or service when the customer pays with a debit or credit card. Ticketing websites, travel and taxi companies, fast-food websites and airline companies commonly used these surcharges. It is estimated that they cost the EU consumers around €550 million a year even though the charges were not always a true reflection of how much the card transactions cost to be processed.
The goal of this law is to provide a clearer picture for consumers and level the playing field between payment instruments. Additionally, this law will enable a greater price transparency, and make shopping and price comparison easier for customers.
The new law will:
– prohibit surcharging, which are additional charges for payments with credit or debit cards, and it applies for in shops and online purchases;
– open the EU payment market to companies offering payment services, allowing them to gain access to information about the payment accounts;
– introduce strict security requirements for electronic payments, and increased protection of the consumers’ financial data;
– enhance consumers’ rights including reducing the liability for non-authorised payments and introducing an unconditional (“no questions asked”) refund right for direct debits in euro.
How this Impacts Taxi Companies in Ireland
In accordance with the European Payment Services Directive (PSD2), it will be illegal for taxi companies, to make surcharges on Visa and Master card or debit card transactions.
Until recently, SVSP service providers in Ireland could charge a maximum of 5% over their genuine costs, as detailed on the Maximum fares Order. This additional “costs” refer to the amount that the bank is charging the taxi driver to process the credit or debit card transaction.
Starting from 13 January 2018 this charge is banned, and taxi passengers will be charged the same amount regardless of whether they pay in cash or by card. Additionally, this new law is set to protect residents and visitors looking to hire taxis or private hire cars from being charged excessive and unrealistic fees.