Major credit card service providers in the UAE have clarified that traders or establishments levying surcharges on payments made through credit cards is prohibited and illegal.
Last week, Emirates24|7 had reported that several major jewellery groups in the UAE blamed fluctuating gold prices and increasing risk, for levying a surcharge on customers paying through credit card.
They said they would continue to charge an additional 2 per cent on all purchases made with credit cards.
“In Visa's operating regulations, which each acquirer is obliged to comply with, it clearly states that merchants must not add a surcharge to a transaction unless the law expressly allows the merchant to do so. Any surcharged amount, if allowed, must be included in the transaction amount and not separately, so that the cardholder is fully aware of the total value of their transaction upfront,” a Visa spokesperson said.
Currently there is no explicit law allowing surcharging in the UAE, he added.
Surcharging is a charge administered by a merchant or ATM acquirer on an electronic transaction for a purchase of an item or service, which would not have incurred the charge if another form of payment was used.
MasterCard also said surcharging is prohibited.
“Unless local regulation permits it, MasterCard has rules that prohibit surcharging in order to ensure that consumers can choose their preferred form of payment, and not be penalized for choosing to use their MasterCard card” Eyad Al Kourdi, Vice President and Country Manager, UAE, MasterCard Worldwide, told Emirates 24|7.
MasterCard believes that surcharging restricts the public’s ability to choose to use whatever payment method is most convenient and efficient for them. Unlike cash, payment cards give people unparalleled access to funds and is a convenient, efficient and secure payment option, he said.
Last week, Emarat Al Youm newspaper had reported that the UAE is about to take measures to stop sellers from illegally taxing credit card holders to offset fees they pay to banks following public complaints.
The newspaper quoted an official at the Supreme Committee for Consumer Protection as saying commissions taken by shop owners and other deals from card holders are illegal.
Al-Kourdi said when merchants choose to accept payment cards, they agree to comply with the acceptance requirements of the payment industry. This is meant to ensure that cardholders can use their preferred form of payment and are not penalized for choosing to use their payment cards.
He said in the event that a merchant violates the policies described above, MasterCard cardholders are strongly urged to report the merchant to their respective card issuing financial institution and provide the name and location of the merchant and a copy of a credit card sales slip.
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