What the law says
On the 13th January 2018, surcharging became illegal in the UK for most card payments accepted in person (via card machines), online or remotely.
The surcharge ban applies to:
- All consumer/personal debit and credit cards
- Mobile wallets like Apple Pay and Google Pay
- Online (e-money) payment methods like PayPal
The regulation applies regardless of what is being paid for (goods, services, donations, taxes, etc.).
Many websites, including the BBC, imply a blanket ban on all kinds of surcharges, but there are actually exceptions to the rule. Merchants can still legally apply a surcharge to transactions where a corporate, commercial and business debit or credit card is used.
The ban was created to protect consumers rather than businesses and commercial transactions. That being said, a surcharge can still legally be applied to transactions completed by a consumer if a commercial card is used. The law applies to the payment method, not who is making the payment.
Apart from commercial cards, businesses are also allowed to add a (limited) surcharge to other payment methods like cash, cheques and Direct Debits.
But any legally permitted surcharge must not be higher than the actual cost of accepting that payment method, except for specific contract-based services such as social housing, health services, residential rental and banking. The latter is a peculiar point that means you can still receive a high surcharge within some areas – but not when a consumer card is used.