Extra charges are typically around 2 per cent but can be as high as 20 per cent of the final bill
The extra charges are typically around 2 per cent but can be as high as 20 per cent of the final bill and can particularly take online customers by surprise when they are just about to complete a purchase.
Some retailers add charges which are far higher than what they pay to process card payments and surcharges cost Britons an estimated £166million in 2015.
The ban being introduced from today applies to any transaction where an extra fee is linked to the use of a credit or debit card.
Although it derives from a European Union law on card payments, Britain has gone further than Brussels required by closing loopholes through including linked payment methods such as PayPal and Apple Pay, and it will remain law here after Brexit.
As we build a fairer society, this added transparency ensures buyers can make informed choices about how they spend their hard-earned money
It applies to credit transfers and direct debits as well as online and other payments.
Treasury Minister John Glen said: “It’s completely unfair for someone to be hit by a hidden fee just before they are about to make a purchase, so by scrapping these rip-off charges we are helping to give power back to the consumer.
“As we build a fairer society, this added transparency ensures buyers can make informed choices about how they spend their hard-earned money.”
The move will ban practices such as British Airways charging a 1 per cent fee of up to £20 on credit cards, Ryanair charging 2 per cent on such payments and surcharges levied by councils and government agencies like the DVLA, which charges a £2.50 fee.
The ban does not include other fees which are not linked to the method of payment
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