April 25, 2013
At the start of April, the UK Government made some additional changes to regulations regarding payment charges, particularly those charges that occur during online purchases at the basket payment stage. These changes could potentially have an impact on the way ticketing and the wider event industry deal with online payments. At ticketscript we have been contacted by several of our event organisers seeking clarity on these new changes and how it might affect them.
The first thing to point out is that the majority of event organisers have nothing to worry about regarding these changes – especially those that are using the ticketscript platform. The main objectives of the regulations are to increase price transparency and make payment charges more reflective in order to allow customers to choose more effectively between different products and services and review the payment methods of these more efficiently. Sellers can still include additional payment charges to products, however these costs have to be reflective to the cost incurred by the seller for accepting a particular payment method. So, for example, where a credit card fee is added to a payment, this fee must only cover the cost borne by the seller to provide this payment option, and also not unjustly vary per payment type used.
For ticketscript event organisers, this legislation should be viewed positively as the industry is now catching up with you! By using the ticketscript system not only are you already compliant with the regulations, you’re also using one of the most transparent and simple pricing models available in the event industry today.
From an industry point-of-view it’s great to see the government taking action to legislate against the additional costs some sellers add to payment charges in order to increase their profit margin, especially towards the end of any transaction when a customer is already hooked. However, there is no clear definition of what constitutes a credit card fee and although there are guidelines attempting to define these, unfortunately they’re still open to interpretation.
Paradoxically the guidelines also state that a seller can include costs which are directly linked to payment method processing – mostly dealing with operational elements such as IT costs (e.g. payment service providers), risk management and reverse or refunding payment fees – but exclude indirect costs such as staff training and general admin overheads, as these are deemed to be covered in the initial cost of the product or service.
By including such costs, it bears the question of whether additional fees do have the true transparency the guidelines set out to achieve. As there is no guidance on the amount of fees that can be added based on the direct costs associated with payment processing methods, it would be interesting to see whether credit card fees become more confusing for the consumer.
As an early advocate of ethical ticket pricing, ticketscript introduced transparent fees back in January in the UK. Ticket buyers only see one service charge fee at the point of selecting their tickets rather than having an additional card processing fee added at the end of the buying process. This one service charge includes any booking fees, and covers all costs associated with the transaction including card charges, staffing, security, VAT, customer service and ongoing technical research and development. This is aimed to increase the confidence of the ticket buyer, making it faster, simpler and clearer – with no last minute or second fee added to a ticket. We welcome a regulation which encourages transparent and reflective fees associated with ticket prices.
However, we’re not certain whether the government has made it even more confusing for customers by including costs directly resulting from processing a particular method of payment. This could open up room for varying interpretation. As the legislation is relatively new, we’re excited to see how it further materialises and what impact this has on the live entertainment industry and the way ticket prices are set and ultimately, how and where in the transaction the costs are presented to consumers.