Except....
A payee must not charge a payer any fee in respect of payment by means of— (a) a payment instrument which—
(i) is a card-based payment instrument as defined in Article 2(20) of Regulation (EU) 2015/751 of the European Parliament and of the Council of 29th April 2015 on interchange fees for card-based payment transactions; and
(ii) is not a commercial card as defined in Article 2(6) of that Regulation
So, you can charge for use of a "commercial card" (at up to your costs). This is not down to whether B2B or not, it is the type of card...
"commercial card’ means any card-based payment instrument issued to undertakings or public sector entities or self-employed natural persons which is limited in use for business expenses where the payments made with such cards are charged directly to the account of the undertaking or public sector entity or self-employed natural person;
OK, some of that is definitive - charged to the business/self employed account. That is a simple matter of fact and the banks could have card prefix ranges for "commercial cards" that are so charged to company accounts, and so allow retailers to charge a surcharge in such cases, except...
This is the unworkable bit of law: "limited in use for business expenses", because that is down to company policy. If a small company wants to not be paying card charges for B2B using its "commercial card", all it has to have is a company policy that states "company cards used for non business expenses will have the amount deducted from salary payments or repaid to the company within 30 days if greater". Now the card can be used for non business expenses and so is not "limited" to such use, so the exception no longer applies and surcharges cannot be charged.
That means the company no longer has to pay any surcharges for use of the card, bingo!
The fun thing is that companies that issue staff with purchasing cards for expenses always have such a clause to allow them to recharge for abuse or simple mistakes, obviously. The card itself is not "limited", none of them are.
Hence the magic, and long winded, exception in that law is pointless and unworkable, so why the fuck do they bother?
P.S. My guess is that "commercial card" is a term in the industry and someone managed to lobby for an exception for commercial cards, but the legal definition got muffed to include the "limited in use for business expenses" making it a definition that depends on unknown company policy and not on simple facts. My expectation is some people will try and charge for use of a commercial card - if they try it with us (as the customer), they'll have an argument on their hands.
So, you can charge for use of a "commercial card" (at up to your costs). This is not down to whether B2B or not, it is the type of card...
"commercial card’ means any card-based payment instrument issued to undertakings or public sector entities or self-employed natural persons which is limited in use for business expenses where the payments made with such cards are charged directly to the account of the undertaking or public sector entity or self-employed natural person;
OK, some of that is definitive - charged to the business/self employed account. That is a simple matter of fact and the banks could have card prefix ranges for "commercial cards" that are so charged to company accounts, and so allow retailers to charge a surcharge in such cases, except...
This is the unworkable bit of law: "limited in use for business expenses", because that is down to company policy. If a small company wants to not be paying card charges for B2B using its "commercial card", all it has to have is a company policy that states "company cards used for non business expenses will have the amount deducted from salary payments or repaid to the company within 30 days if greater". Now the card can be used for non business expenses and so is not "limited" to such use, so the exception no longer applies and surcharges cannot be charged.
That means the company no longer has to pay any surcharges for use of the card, bingo!
The fun thing is that companies that issue staff with purchasing cards for expenses always have such a clause to allow them to recharge for abuse or simple mistakes, obviously. The card itself is not "limited", none of them are.
Hence the magic, and long winded, exception in that law is pointless and unworkable, so why the fuck do they bother?
P.S. My guess is that "commercial card" is a term in the industry and someone managed to lobby for an exception for commercial cards, but the legal definition got muffed to include the "limited in use for business expenses" making it a definition that depends on unknown company policy and not on simple facts. My expectation is some people will try and charge for use of a commercial card - if they try it with us (as the customer), they'll have an argument on their hands.
Perhaps because if someone takes the piss and it ends up in court, it allows a judge to get an idea what the intent of the law was, to decide which way to rule.
ReplyDeleteNo really, make the rule fucking clear in the first place.
DeleteIsn't this connected to a similar exemption in earlier rules, which limited the fees issuers could charge for transactions, but only for "consumer" cards? https://www.out-law.com/en/sectors/financial-services1/payment-services-directive-and-interchange-cap-proposals/
ReplyDelete(This was apparently the real reason for Curve being for the self-employed only, or similar wording - that allowed them to claim to be "commercial" cards rather than "consumer", hence charge the higher transaction rate. Otherwise, the rate they charged Boots for my bottle of Diet Pepsi this afternoon would be the same as the rate the Bank of Scotland charged them when they passed the transaction on, and their whole business model implodes...)
Silly rules, silly loopholes.