Differences when paying by card

Differences when paying by card

In the last period ECC Romania received several complaints against professionals selling online, on the subject of card payments. Consumers claimed that, although the price on the website was in RON, on their bank excerpt  they was a different amount resulting from a conversion from EUR.

In these situations professionals informed consumers the liability pertains to the banks issuing the card which, apparently, applied certain fees for those transactions. The professionals have motivated the price and the amount requested from the bank were in RON. The issuing banks informed consumers no fee is applied for paying with a card (in fact, this is prohibited by law).

Where is the truth?

The solution to the problem of the difference between the indicated amount on the website and the amount taken from the consumers’ cards is given by the state where the professional’s bank is situated. The complaints were directed against professionals registered in other EU member states, whose banks are situated outside Romania. As the two banks are in different member states, the transaction between them cannot be done in RON, even if it is done between two accounts in RON, but there is a conversion in EUR (”settlement currency”).

In practice, after the payment is authorized by the consumer and the order is confirmed by the professional, the professional sends a request for payment in RON to the consumer’s issuing bank. As this is a transaction between banks in different states, the card companies (VISA, MASTERCARD, AMERICAN EXPRESS etc.) do the transaction by converting the amount from RON to EUR („settlement currency”), using their own currency exchange rate and they take the amount from the consumer’s aacount. After this, the amount is transferred to the professional’s account, through a new conversion.

Usually, professionals should know this mechanisms and inform consumers on the fact the amount taken from the account could be different from the one indicated on the website as a result of the conversion in EUR for the inter-banking cross-border transfer. If this information doesn’t exist, this could be an unfair commercial practice and consumers should be allowed to recover the price differences.

Solutions

ECC Romania publicly appeals to professionals in this situation to find a solution to this problem. From our perspective, there are at least two possible solutions:

  • professionals inform consumers before the purchase in a full and precise manner, explaining them how the differences appear and giving them the possibility to choose between continuing or abandoning the purchase,
  • professionals use, for payment by card, an account opened with a Romanian bank, avoiding the cross-border transaction and the conversion in EUR (”settlement currency”).

”We think that ignoring this call can lead to an increase of the distrust in card payments and a lowering of the volume of these transactions, in a moment where more and more professionals and consumers opt for card payment and when there are efforts for popularisation of card payment, which would be in the dissadvantage of all interested parties”, declared Irina Chirițoiu, ECC Romania Director.

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