Why is there a fee when making online payments?

Why is there a fee?

There has been a lot of negative publicity in the press recently regarding unfair charges when paying by credit and debit cards with large multinational companies. As a result of this we are regularly asked why we charge so much for our using credit / debit cards to pay for PPS membership. 

Press reports and politicians have mis-represented the costs of payment processing - sometimes claiming are only GBP £0.20. As you will see from the fees we are charged below - this is true, but they have failed to explain that a % transaction levy which varies depending on the amount our turnover, is also charged on top of the payment processing charge. Large companies with high turnovers have the luxury of being able to negotiate these down to very small amounts with their banks. As a small organisation, PPS has to shop around for the best deal on your behalf. 

Under the Consumer Rights (Payment Surcharges) Regulations 2012 we are allowed to levy a surcharge on our costs as long as this does not exceed the actual costs of processing that PPS pays the payment gateway (merchant processing company) as long as we are transparent on this process.

PPS are charged for members who pay using credit and debit cards. You can view the fees we pay directly on the website of our payment gateway. We are typically charged between 2.4% and 2.9% on our fees depending on how busy we are in any given month. PPS absorbs some of the transaction levy and all of the processing charge and passes the rest onto our members at 1.98%. We routinely check for cheaper payment gateways which would suit all our members. If you do not wish to incur additional charges, you may wish to look at the other payment methods listed on your application or renewal forms.

Additional Information (June 2015) 

PPS is a not for profit defence organisation owned entirely by you and your fellow members. All profits are held in trust on your behalf and may be accessed by you on a discretionary basis to cover professional protection problems that are not covered by standard insurance. The considerable costs incurred for payment processing are currently partially absorbed by the Trust, though this reduces the overall funds available for all members.

 

New legislation has been passed in the European Union that further limits the amount that businesses can charge and this will come into effect in October this year. As PPS has less than 10 staff, we are classed as a microbusiness and therefore exempt from this new legislation.  We are however in the process of negotiating with a new payment gatewaycompany and hope to announce this by our AGM in September this year, though if possible we will introduce the new system before then. The new payment gateway company will not charge us on a per transaction basis, but instead on the basis of an annual fee which will be met instead entirely by the PPS Trust. This will mean that once introduced we will no longer have any surcharges for members, which will instead be absorbed in any uniform price increases for all members.