ROS credit card levy

M

mccoypat94

Registered User
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From last week the levy on credit card was due to be abolished. However when processing a P35 today I was asked for 1.1% levy for using a credit card? Surely this is illegal.. if businesses can't charge how can Revenue?
 
The site is most likely not updated, I would query this, if they call it a service charge then it is allowable but given this is a State service that would be ridiculous.
 
Businesses can't charge a levy, but they still get charged by the credit card company. So they have to build the charges into their prices (which means everybody pays, not just those using credit cards). Revenue obviously can't do this as you are not buying goods or services when you use a credit card to pay tax. So I think you will continue to see this levy from Revenue.
 
They can pass on any direct 3rd party charges, as they are not included in the goods / services covered in PSD2. It's clear on their website these are 3rd party charges.

Also, remember the card surcharge ban only applies to 'consumer' transactions. For Business transactions the ban only applies to credit transfers and direct debits - they can still charge for debit / credit card processing (I know Revenue apply across the board).
 
Can shops still charge for the use of a debit card for transactions.

Went into a local shop recently intending to purchase an item costing €8.99 , was advised of a 10c charge for transactions less than €10.
The same shop rounds up so, pay by cash cost €9 or pay by card cost €9.09 .
Either way the shop gains .
This at a time when we are being encouraged to use cards over cash.
I have also noted that a certain chain store has all it's prices at **.99 c so, buying two or less items for cash means extra profit for the store.
 
CiaranT said:
I heard before that some point of sale providers prevent retailers from applying a minimum transaction amount. Any truth to this?
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I've never heard of that, but one observation I would make is that anyone imposing a minimum transaction amount is quite likely paying more than they should in merchant fees.

When I started a business about four years ago, the rates were high. Despite this, we decided not to impose a limit on card transactions, as we’re aware of how annoying it is: we just took the hit. Around 30% of transactions were card rather than cash when we started.

Now it’s a lot more competitive amongst card merchant service providers, down at 2 or 3c per transaction and/or sub 2%, depending on the card type. At that level, I’d say there’s very little justification for imposing a limit on value of card transactions. Anyone doing so are only shooting themselves in the foot; within the past six months, we’ve gone over 50% card transactions (and this in a business where average spend is less than €10). Our total card fees for last month were a shade over 1% of the transaction value.

Like many things, though, you only get the reduced rates if you either move provider or threaten to do so, and I suspect many businesses don’t do this and are left paying much larger fees.
 
newtothis said:
Our total card fees for last month were a shade over 1% of the transaction value.
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That's pretty good considering you're talking about low value transactions. I'm assuming your bank charges you about that for cash handling fees if you were lodging cash? I agree with your post - shop keepers tend to get caught up with the card fee, and ignore all their other bank fees. It probably goes back to a mindset when it cost 50p each for processing card payments.

CiaranT said:
I heard before that some point of sale providers prevent retailers from applying a minimum transaction amount. Any truth to this?
Click to expand...
I'm not involved in the merchant side, but even if there is no limit on the physical device, the shop policy can dictate it - I've seen it in smaller shops where the device is behind the till and has to be handed to you.
 
RedOnion said:
That's pretty good considering you're talking about low value transactions. I'm assuming your bank charges you about that for cash handling fees if you were lodging cash? I agree with your post - shop keepers tend to get caught up with the card fee, and ignore all their other bank fees. It probably goes back to a mindset when it cost 50p each for processing card payments.
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The direct bank costs of handling cash are about half that of the card payment fees. However, this doesn't include the staff costs of all the time spent in handling it, plus the security risk.

The proportion of card payments is going up all the time, especially since the contactless payments came in.

RedOnion said:
I'm not involved in the merchant side, but even if there is no limit on the physical device, the shop policy can dictate it - I've seen it in smaller shops where the device is behind the till and has to be handed to you.
Click to expand...

I've seen customers turned away because they didn't have enough cash and the sale was below the minimum card sale. Madness - you can be pretty certain they never went back there again.
 
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