Credit Card fees going up

[oz_mark]

Latest Qantas News

Credit Card Service Fee Update12 September 2008
Effective 19 September 2008, Qantas will apply an increase to the Credit Card Service Fee (CCSF) rates charged.

Qantas currently applies a Credit Card Service Fee (CCSF) in order to partially recover the total cost of merchant service fees. The CCSF is applied at a fixed rate per passenger per ticket. At its current levels the CCSF does not result in a satisfactory level of recovery of total merchant services fees.

Customers who do not wish to use credit or charge cards, can pay using cash at their travel agent.

Current rates:
• $6.60 (including GST) for Domestic bookings
• $6.60 for Tasman & Domestic NZ bookings
• $18.00 for all other International bookings

New rates, for tickets issued on/after 19 September, 2008:
• $7.70 (including GST) for Domestic bookings
• $7.70 for Tasman & Dom NZ bookings
• $25.00 for all other International bookings

It is important to note that no other processes or collection procedures will change.

 

[kpc]

What justification do QF have for this, apart from increasing their revenue?
I use Bpay and I guess will continue to do so given this latest rise...

 

[dajop]

Aaah whilst airlines are going bust or are in deep do-doos everywhere it's good to see that QF has a robust enough business to support these sorts of increases ....but as taxpayer's let's not forget the 70c the govt gets out of this as well!!

So on a typical $1250 fare to SE Asia they recover 2%. (Ok on business class fares to same they only recover around 0.5%, but I'm sure they can build it into the fare anyway ...)

 

[medhead]

So on a typical $1250 fare to SE Asia they recover 2%. (Ok on business class fares to same they only recover around 0.5%, but I'm sure they can build it into the fare anyway ...)

Or build it into the 7.7% they get on a $100 domestic airfare. Most of my potential domestic flying is between $80 and $200 - 9.6% :!: to about 3.8%. :!::!:

That's B***** high considering QF is likely to be paying 2% or less in my guesstimate.

 

[opusman]

I'd say for Vista/Mastercard they're much more likely to be paying < 1%. You can thank the Reserve Bank for their (and other companies') ability to price gouge on credit card charges

 

[albatross710]

How do we get the RBA interested enough to enquire into Qantas calculations on this?

I thought the original idea was for surcharges to be transaprent, so if some customers are paying 9.6% of transaction value & others are <1%, doesn't sound equitable.

 

[Flashback]

And can someone please explain to me why International is so much more? Surely it costs much the same.......

 

[JohnK]

Partial recovery? Is there anyone, other than QF, that thinks this is justifiable?

 

[codash1099]

And can someone please explain to me why International is so much more? Surely it costs much the same.......

QF are charged a percentage but charge users a flat fee. At higher fares, they are relatively worse off.

If there is to be any cost recovery, it is fairer to charge a percentage rate. The question should be why charge at all and the answer is (as always) that they can!

 

[oz_mark]

How do we get the RBA interested enough to enquire into Qantas calculations on this?

You can't. Consider what they wrote in the "REFORM OF AUSTRALIA'S PAYMENTS SYSTEMRELIMINARY CONCLUSIONS OF THE 2007/08 REVIEW – APRIL 2008" RBA: Preliminary Conculsions of the 2007/08 Review April 2008-Summary of the Main Conclusions

The Board sees no case for allowing the schemes to re-impose their no-surcharge rules. It has considered altering the existing Standard to allow schemes to limit the size of any surcharge, but is of the view that such a restriction is unnecessary and would limit the competitive pressure on interchange fees that can be imposed by merchants

i.e. the RBA thinks it appropriate that merchants can set a surcharge however they like without regard to cost.

 

[albatross710]

The ACCC thinks that banks can put pressure on the vendor:

The merchant can set the value of the surcharge however the merchant's bank can restrict the merchant from charging a fee that is greater than the merchant service fee.
Bank fees & credit card surcharges

I recall reading somewhere in the RBA mutterings that the merchant can only recover up to the cost of recovering the merchant charges. Qantas is saying that it is acceptable to overcharge some customers (low value fares) because some other customers (high value fares) pay a lower % .

Fundamentally I accept the recovery of merchant charges, my issue is the "averaging" across the board. Perhaps a percentage charge would be better.

 

[oz_mark]

The ACCC thinks that banks can put pressure on the vendor:

Getting banks to keep their fees to the costs incurred is hard enough. I hardly think expecting them to police surcharges is an intelligent approach. Regulation is the only thing that could conceivably restrict surcharges in such a way.

 

[Leumas]

The ACCC thinks that banks can put pressure on the vendor:

<rant>
This ranks one of the most stupid things I've ever read (referring to the ACCC, not Albatross).

The Banks have no interests in policing surcharges. It's the same as charging customers with using other banks' ATM. If every bank charges, the fee may seem competitive, but there shouldn't be a fee in the first place.

I'm not against them charging to cover cost, but the key thing is why is this charge any different from any other costs...?!

</rant>

 

[Alanslegal]

I guess QF and other airlines can impose these crazy charges and getaway with it because 1) leisure travellers will cop the CC fees on the chin and pay up and 2) frequent business travellers have their employers forking out the cash and thus the charge does not hurt their own employee's hip pocket.

 

[nifty]

Paid 20% CC Surcharge with Tiger today

20% surcharge for Visa transaction

I guess I can't complain too much on a $20 fare

BUT is this what the RBA had in mind when it permitted surcharges for the benefit of both merchants and consumers?????



Tiger is charging CC fee of $4 per passenger per flight sector, with no alternative method of payment for online transactions.

 

[oz_mark]

Re: Paid 20% CC Surcharge with Tiger today

Tiger is charging CC fee of $4 per passenger per flight sector, with no alternative method of payment for online transactions.

but they call it a convenience fee..

 

[Flashback]

Re: Paid 20% CC Surcharge with Tiger today

but they call it a convenience fee..

Technically that is correct. It is very convenient for them the passenger however.. is a different kettle of fish.