Bank of Lithuania: Consumers should not pay for a merchant’s chosen payment method

Consumers should not have to pay extra simply because a merchant selected a particular payment provider, the Bank of Lithuania says.

The issue can arise when people shop online, pay for parking through an app, settle a restaurant bill using a QR code or pay for public and other services. In some situations, such charges are prohibited. In others, consumers must be told about them clearly in advance and given a free way to pay.

“Consumers come to buy a product or service and should not have to pay extra for the payment method chosen by the merchant,” said Evaldas Ruzgys, a board member of the Bank of Lithuania. He said it was especially unacceptable when customers already pay their bank or another provider for payment services, yet face a second charge for an individual transaction.

When a merchant accepts card payments, the payment-acceptance service comes from a provider chosen by the merchant. Under current rules, the merchant must pay for that service and cannot pass the cost to the buyer as an additional card-payment fee.

Online merchants and mobile applications often direct customers to their internet banking to initiate and approve a payment. A payment-initiation service provider may legally charge the consumer in some cases, but the bank says the merchant chooses that intermediary to collect payments conveniently. It recommends treating payment-acceptance costs as business expenses and factoring them into prices instead of charging customers for their chosen payment method.

The bank advises consumers to check the final price before confirming a transaction. Not every payment method must always be free, but any applicable fee must be disclosed beforehand, and customers must have access to another option that carries no additional charge.

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Consumers come to buy a product or service and should not have to pay extra for the payment method chosen by the merchant