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Surcharges will be prohibited from 13 January 2018

by | Sep 14, 2017

The EU Payment Services Directive (PSD2) will make it illegal for any organisation to charge customers for paying with a debit or credit card in the EU. This directive has already been incorporated into UK law, following a vote in parliament in March and it will therefore remain law after March 2019, when the UK leaves the EU.

The UK Government has gone further than the Directive, by also banning charges for using American Express and linked ways of paying such as PayPal, or Apple Pay.

Now more than ever before, it is essential that councils have a coherent customer payment policy/strategy, to assist in the efficient and cost effective delivery of services and one which should form part of a council’s overall approach to income management and the wider fees and charges policy. Objectives can include:

o Reducing levels of bad debt and reducing average days to pay
o Increasing the volume of payments made before or at point of service delivery
o Having payment methods that meet the expectations of customers
o Having proportionate transactional payment costs

If not already done so, now is certainly a good time to review your customer payment policy. If you require support in reviewing and streamlining this important and possibly costly area, please do not hesitate to contact us.