The Payment Services Regulations 2017 For Travel Businesses

From 13^th January 2018 guidance on the consumer rights, payment surcharges will be changed in accordance with the Payment Services Regulations 2017, which was updated by The Department for Business, Energy and Industrial Strategy (BEIS).

What does The Payment Services Regulation 2017 Changes Mean?

The new regulation ban card charges in the addition to advertised prices for most retail payments. This includes debit and credit card payments and also non–card based payments such as mobile phone payments, i.e. Apple Pay and such like. Electronic payments such as PayPal are also included.

Payment Services Regulations 2017 Application For Tour Operators and Travel Agencies

The payment surcharges ban applies when the payment services providers of both the client and the merchant are in the EEA. The ban is also applicable to all payments whether they are made on site, online or via telephone.

On the other side of the coin, companies are allowed to make a charge for other retail payment types such as cash, direct debits, cheques or standing order. But, the surcharges to the consumer must not be more than the company is charged. The original ban on excessive charges in the Consumer Rights Directive still stands.

Firms are allowed to charge other fees. Other fees would include booking fees, delivery fees, administration fees and such like but these need to be standardized and applicable to all bookings and not influenced by how people pay.

The Key To Understanding The New Payment Services Regulations 2017

The key to understanding the consumer rights is that “Business must quote the price of a product, e.g. goods or services, inclusive of any non–optional surcharges wherever the quoted price appears.”

In essence, there must be no hidden costs.

Exclusions and Penalties

There are certain exclusions to the rules such as, contracts for the construction of new buildings, foodstuffs, rental properties for residential use and a few others. AS you can see, there are no exclusions for any area in the travel industry and as such this new legal change is applicable throughout the travel industry.

The penalties for charging the extra surcharge can result in large fines and imprisonment if a company were to ignore this new legislation.

Methods For Travel Businesses To Work with The Increased Costs

So, as of January 13^th here are some methods for your tour operator business, or travel agency, to work with the increased costs.

• Increase the advertised price of packages and experiences
• Absorb the cost – this is a commercial decision that only you can make for your travel business. This will impact profit margins but it could be great for consumer confidence.
• Stop taking a certain payment method. You may choose to stop taking credit card payments, as it is credit cards that tend to have the most expensive merchant fees. However, this may not be commercially viable for many travel companies as consumers tend to prefer to use credit cards for the payment protection included.
• Negotiate lower merchant facility fees – this is the most powerful solution for most travel fees to soften the financial impact.

PTS Merchant Facility Solutions For Tour Operators and Travel Agencies

PTS has partnerships with many merchant facility providers and as such we can gain merchant facility solutions for all of our tour operator and travel agency members. Our merchant partners offer PTS members incredible rates

If you would like to discuss this further or for any other questions then please contact PTS on 020 7190 9988 or email – ask@protectedtrustservices.com