Customers illegally charged credit card processing fees

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With the use of plastic money and seamless payments rising due to the coronavirus pandemic, some small retailers illegally transfer credit card processing fees to consumers.

From kiosks to plumbers and lawyers, all retail businesses and services in Cyprus must accept card payments, with a law coming into effect from September.

However, smaller businesses are transferring the processing fee to the client, arguing that they have a small margin of profit, wiped out by such fees.

Reportedly, kiosks charge two to four cents for every transaction involving cigarettes, mobile top-up cards, milk, newspapers, and magazines.

The Financial Mirror has received complaints that kiosks are charging 20 to 30 cents more for paying with a credit card in some cases.

Some kiosks even display a sign informing customers of the extra charge.

In comments to news website Philenews, the general secretary of the small shopkeepers’ association POVEK, Stephanos Koursaris, said the practice was illegal, but small enterprises should be given some ‘slack’.

Koursaris argued that come September 18, when the law making it compulsory for all retailers and service providers to accept credit cards, they will see their operating costs increase amid a crisis brought on by the coronavirus outbreak.

He said the profit margin for some products such as cigarettes, phone cards, milk, newspapers, and magazines is negligible.

“With the mandatory acceptance of the credit card, tiny profit margins will disappear, making small businesses unprofitable.”

POVEK is preparing a memo to be sent to Finance Minister Constantinos Petrides, asking the ministry to allow retailers to sell certain items for cash.

It will also suggest the law be amended to allow retailers the right not to accept credit cards for purchases under €10.

Cyprus is making accepting credit card payments compulsory to align its national legislation with EU directives.

The European Directive on the provision and use of payment services and access to payment systems states that “no charge shall be levied on the use of means of payment to which interbank charges apply”.