The United Arab Emirates is planning a series of enforceable regulations that will put more teeth into prohibitions against merchants assessing surcharges on credit card purchases.
Many merchants reportedly charge credit cardholders roughly 1.5% of the transaction amount to offset the fees they pay to their banks. Assessing such fees is illegal and will not be tolerated, a spokesperson for the federation’s Department for Consumer Protection tells PaymentsSource.
Regulators plan to introduce fines and prison time for merchants found guilty of card surcharging and to create a mechanism for paying cardholders back, he says.
The department received many complaints about the charges last year, the spokesperson adds. “It seems that the fee also varies with the size of the transaction,” he says. “Small-ticket purchases are taxed around 1%, and bigger ones at 5%, greatly inflating the cost to the customer.”
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