Services exempt from card fee ban

A decision by the UAE to ban shops and other retailers from charging fees on credit card holders is not applicable to public services, a senior economy official was reported on Wednesday as saying.

Mohammed Al Shehi, director of the ministry of economy, said the ban that will be enforced on July 1 would be applicable only to purchase of goods from shops as it does not cover paying fees for government services.

“Government services are different from purchase of goods as they provide an extra service to consumers…the alternative is to pay cash because public services account for less than 10 per cent of goods purchases,” he told the semi official Arabic language daily Alittihad.

“Using credit cards by their owners in buying goods accounts for more than 90 per cent of their total card transactions and that is why we have issued the ban…we decided that it is not fair to collect extra fees on the purchase of a known consumer item just because the buyer does not pay cash.”

The paper quoted another economy official as saying banning surcharges on credit card purchases was based on the fact that consumer items yield a profit margin to dealers. “This means dealers have no right to impose charges on credit card holders just because they do not have cash,” said Omar bu Shehab, director of the trade control and consumer protection division at the Abu Dhabi Department of Economic Development.

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