Payment Surcharges Banned Under New German Law Implementing PSD2


Retailers will be banned from applying surcharges to many credit and debit card payments made by consumers under new laws finalised in Germany.

The new legislation implements the EU's revised Payment Services Directive (PSD2) and will come into force on 13 January 2018.

Under existing rules, online retailers are able to recover the costs they incur when accepting certain payments from buyers provided that they provide alternative common and reasonable means of payments to those customers for free.

However, under the new rules, set out in a new section of the German Civil Code, online businesses will no longer be able to apply cost-covering surcharges when accepting many common types of payment.

The new rules will apply to all SEPA credit transfers and direct debits, as well as debit and credit card transactions processed via a four-party scheme, such as payments made using Visa, Mastercard and Girocard, which are popular in Germany.

However, retailers can continue applying surcharges to payment card transactions where a three-party scheme is in operation, such as American Express or Diners Club payments.

A four-party payment card scheme involves a customer cardholder, an issuing bank, a retailer and an acquiring bank. A three-party scheme is where the issuing and acquiring bank is the same entity.

The new ban on surcharging will only apply to business-to-consumer transactions. Retailers will be able to recover the...

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