New charges to be introduced for paying by credit card in Spain from January 2010

On top of increasing VAT next year, it looks like there will be a fee for paying by credit card in Spain from January 2010.  There's more info here.

The PSOE seem to be determined to cause even more damage to the Spanish economy.

The easy solution is to just pay by cash I guess.

I think the 1% is naive or wishful thinking. In the UK the seller has the option of adding the charge but very few actually exercise the right. A minority do abuse it by adding as much as 4% but I think the practice is dying out as customers rebelled. I certainly wouldn't shop or dine anywhere that added the card commission (or more) to the bill.

As a point of interest the credit card companies rightly point out that people using their card invariably spend more than does the cash buyer. For instance you get 10€ worth of petrol when paying cash, you get 20€ or 30€ if paying by card. If those taking payment by card are hard done by then why don't they change to 'cash only'.

As an ex-retailer - and a card service provider it is something I know about. Believe me, taking payment by card is the best thing that ever happened to commercialism. I once asked a jeweller how much of his transactions were by card. (I knew the answer). He said 40 percent. He then complained about the 2/3% commission. My reply: 'If you can get me a salesman who can generate 40 percent of business in return for such a small commission tell him to call me.'  The jeweller never said another word.

Interesting. Only 40%? I expected the answer to be much higher. But is it fair to say the credit card companies "generated" the sales? Maybe they facilitated them. Surely the jeweller would still have had to pay his salesmen commission though?

I would have to agree with Roberto 40% of sales with a card does seem low especially in somewhere like a jewellers where the average sale must be £100+

I owned retail stores in England between 2001 and 2007 and 90% of the sales were with a card and my avererage sale was only £40. Dont believe what they tell you about the charges either. I never paid anything like 3%, even when i had just started the business. (i would be surprised if someone like Next even pays 0.5%)

There are so many benefits for the retailer to take cards that they should not complain about the small percentage they have to pay the card companies. The less cash you take the better in my opinion. The money is credited to your account almost instantly. It saves keeping cash on the premises which reduces the risks of robbery. Staff pilferring. Trips to the bank. Counting and sorting the cash (if you are paying someone to do this then it could actually cost more than the commission).

If it will be optional to add the commission for the card charges to the bill i think it would be foolish for any establishment to try and pass this on to the consumer. Much better to incorporate it in your prices at the outset. How many times do i hear "can i pay cash" when a customer discovers a price they have seen is plus vat/iva. People hate extras loaded on to there bills.

I agree with the comment that the 40 percent seems on the low side: It was however in 1985 when cards weren't as popular as they are today. I was once frustrated when chatting to a chap who owned an art shop on Liverpool's waterfront malls. I wanted to buy a picture but on getting my plastic out he tells me he takes cash only. Several other customers overheard and expressed surprise; some leaving. He was adamant: He had no time for such things.

Next door was situated Sewells, the nautical instrument makers. Like the owner of the art shop their choice of products was based on impulse purchases. I asked the lady in there how much of her business was on cards. She replied, 'At least 90 percent.'   Not surprisingly the art shop wasn't open for very much longer. It went out of business. A wonderful artist but he shouldn't have been allowed anywere near a business.

We had an arts and crafts business for 10 years, up to 2004. 

When we first started off we only took cash and cheques, because the credit company charges for a new business were so prohibitive.  After two years, when our business was established, the charges dropped significantly, and we took up this up.

Funnily enough a lot of people still preferred to pay by cheque!  But the option was there! 

I seem to recall the charges were routinely added to a credit card bill 15- 20 years ago in Spain. I think it would be foolish for a business to add the extra, although you may find some of the smaller shops/ restaurants making a charge. Incidentally, not sure if a new rules were needed? My Spanish solicitor already asks for 3% on top of his bill if I want to pay by credit card!

Mark

I find that Spain is years behind the UK when it comes to credit cards and banking in general.  Many people here still pay by cash - and of course for small businesses there are the benefits of choosing what they declare and what they don't.

I recently tried to pay my Avon account using my spanish debit card in a bank and they refused to accept it, saying I could only pay by cash!  I also tried to get change for a 500€ note in another bank (was being paid my commission for a house sale in cash at the Notary and the client didn't have change) and the bank refused to change it unless I was a customer!

Like living in the dark ages sometimes!

Mike - you remember conversations from 1985?! I have difficulty with last (but that's another story).

The Scouse art dealer of course only wanted cash - no paper trail; the paintings were probably knicked from the nearby Tate! (I can say this - I'm Scouse by marriage).

Claire, I agree Spain seems way behind the UK on banking, especially charges on accounts in credit etc.; the most annoying thing now is the restrictions on paying bills - even paying my community fee last month, I was told I could only pay in cash on Tuesdays and Thursdays between 8am and 10am, between the 10th and 20th of the month. Of course, they want you to do it all by standing order, but as I said before, I don't trust them. This morning I paid two bills (electric & 'phone) at the Post Office. Total €117.24. I gave the clerk €120.25; he gave me €2.50 change, and when I told him this was incorrect, he had to use his pocket calculator to check it. Scary stuff. I put this down to poor education / training (although the errors are never in your favor, which makes one a little suspicious) but I don't think this is necessarily unique to Spain.

On a side note, most banks are now withholding paid in communty funds for 25 days before they are cleared to draw on. Not sure on what grounds, but it's causing havoc in some communities.

I was told last year by my accountant that the Spanish tax man required me to pay for my diesel by a Spanish credit card so that he could follow the paper trail if required.

I got a Cajamar Visa card and originally whatever was purchased from the 1st of the month to the 27th of the month,the total was debited from my account on the 5th of the following month.When the banks went t*** up,the payment system changed and now it`s whatever is purchased from the first of the month till the last day of the month is then debited on the 1st again.There is no "oh I`ve had a bad month,I`ll pay half of it and try and catch up next month over here"I suppose though,that is good as you are unable to run up a large credit card bill.

As for the tax man keeping track of me the lorry has an 850 litre tank,so I virtually buy all my diesel in the one garage in Huercal Overa who only sells diesel at 6 cents a litre less than Cepsa or Repsol.Other than there, I just top up the tank at Bilbao before getting on the ferry,so he can take his pick of 2 regular garages !

jimbo