Nicholas Harding-McKay, managing director of London-based Travel Designers, received a letter from Barclaycard announcing new debit and credit card charges at the end of January.
“Debit card payments have been set at a flat fee of 27.5p per transaction, regardless of value, but now that’s changed to 0.35%,” said Harding-McKay.
“Our average booking is £6,000 so that means the debit card charge will be £21, which is a 7,500% increase – why should I have to absorb that? How can banks get away with such an increase?”
Barclaycard confirmed that it was putting in place a new percentage-based charge for debit cards. This follows the EU’s capping of interchange fees between debit card issuers and merchant acquirers at 0.2%. Interchange fees relate to the charges between the issuing bank and the bank receiving the payment.
“Since September 2016, Barclaycard has enacted a new fee model whereby any new merchants joining us are charged a percentage on debit card transactions rather than a flat fee,” said Barclaycard.
“We have also been gradually transitioning our existing customers on to this model. To our knowledge, other merchant acquirers have also moved to this pricing model.”
The new charges were due to apply to Travel Designers’ transactions from March 1.
But after Harding-McKay contacted his account manager at Barclaycard the changes were put on a temporary “stop”. The agency is a member of the Global Travel Group, which also works with the card company.
“This will probably only put things back by a month,” added Harding-McKay. “This could cost us thousands of pounds a year – debit fees could rise from under £200 to about £7,000 a year.
“There’s a way around it by using a bank transfer but that its putting more of a burden on a small business.”
Global said in a statement: “Each individual agent operating their own business will have their own agreed rate with the bank.
“We approached Barclaycard about this as soon as we were made aware by our agent, and we are awaiting their response. We will support them wherever we can.”
