UK to crack down on 'rip off' card fees

[July 19, 2017]  By William Schomberg

LONDON (Reuters) - 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.

The total value of surcharges for the use of debit and credit cards, which have also included fees from government departments, was estimated at 473 million pounds ($617 million)in 2010, the ministry 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," Stephen Barclay, economic secretary to the Treasury, said in a statement.

Shares in take-away food app Just Eat <JE.L> dropped by 6 percent on the news, one of Europe's biggest share price falls on Wednesday, while shares in airlines EasyJet <EZY.L> and the owner of British Airways, IAG <ICAG.L>, also weakened.

British Prime Minister Theresa May has said she wants her government to do more for "just managing" households who face wage increases that are lagging behind inflation.

Under the changes due to be introduced on January 2018, surcharge fees will be eliminated for payments including those made on American Express <AXP.N> credit cards, Paypal <PYPL.O> and Apple Pay <AAPL.O>.

This goes further than a European Union requirement to scrap fees for consumers using Visa <V.N> and Mastercard <MA.N> cards, the ministry said.

In December 2015 Britain capped the transaction fees that banks can charge companies at 0.3 percent for credit card payments and 0.2 percent for debit cards as part of European Union-wide limits.

(Additional reporting by Helen Reid; Editing by Alison Williams)

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