Qantas to change credit card surcharge from flat fee to percentage

[anat0l]

Credit card surcharge to change from $7 domestic / Trans-Tasman and $30 international to a fixed 1.3% on total fare.

For debit cards and Qantas Cash, it will be 0.6% on total fare.

Credit card surcharge is capped at $11 for domestic / Trans-Tasman, and $70 for international.

New rules to come in 1 September.

The quick math? If your fare is greater than about $530 for domestic / Trans-Tasman or about $2300 for international, you'll pay more than now for the surcharge. If your fare is greater than $845 for domestic / Trans-Tasman or $5380 for international, you'll pay the maximum surcharge.

Qantas increases credit card booking fee for business, first class - Australian Business Traveller

 

[junbugging]

I wonder if $119 fares will increase to, say, $125. Sounds like a nice round number.

 

[eminere]

As long as flight vouchers are unaffected...

 

[ComeFlyWithMe]

Qantas credit card charge changes coming

Credit card fees are changing.
Cheap fares going down, expensive fares going up.

Time to stop booking J/F direct methinks...

Schedule of Fees for bookings made from Australia | Qantas

AusBT picked it up too:
Qantas increases credit card booking fee for business, first class - Australian Business Traveller

 

[eminere]

Re: Qantas credit card charge changes coming

http://www.australianfrequentflyer....antas-change-credit-card-surcharge-76977.html

 

[get me outta here]

Re: Qantas credit card charge changes coming

There's 2 threads on this subject: http://www.australianfrequentflyer....-credit-card-surcharge-76977.html#post1475772

 

[MEL_Traveller]

I dunno - even 1.3% sounds a little high to me? Maybe that includes the average of the differing prices charged by AMEX/Diners v Mastercard/Visa? I thought the cost of accepting visa and mastercard was lower than 1.3% for a large company?

 

[ftm]

I dunno - even 1.3% sounds a little high to me? Maybe that includes the average of the differing prices charged by AMEX/Diners v Mastercard/Visa? I thought the cost of accepting visa and mastercard was lower than 1.3% for a large company?

Under the new rules you're not allowed to blend VI/MC and Amex. If a company chooses to use only one surcharge, it must be the lower. I think the capping at $70 is very favourable for premium cabins. Means that on those tickets the pax won't be paying the full cost of card acceptance.

 

[trippin_the_rift]

I dunno - even 1.3% sounds a little high to me? Maybe that includes the average of the differing prices charged by AMEX/Diners v Mastercard/Visa? I thought the cost of accepting visa and mastercard was lower than 1.3% for a large company?

There would be a high number of international and premium cards which would bump up the acceptance rate, combined with travel industry higher fraud rates etc and it's probably not too far away from the actual hard transaction fee cost.

Under the new rules you're not allowed to blend VI/MC and Amex. If a company chooses to use only one surcharge, it must be the lower. I think the capping at $70 is very favourable for premium cabins. Means that on those tickets the pax won't be paying the full cost of card acceptance.

Keep in mind this is only for qantas.com.au bookings which make up only a % of all qantas ticket sales. Personally I get sick to the stomach with the thought of paying any type of surcharge on a high margin product. Many travel agents and OTAs have zero surcharges and can often have lower pricing. It always pays to shop around.

There is a lot of proof around which indicates the extra fee is all about revenue grabs rather than legitimately trying to recoup transnational expenses. For example - there are no credit card fees on gift vouchers, award flights or staff travel which all use credit card as payment.

QF may be better off turning the real estate for surcharging into up-sells which benefit the passenger and don't create a negative experience while having potential to generate even more revenue than a surcharge creates (keeping in mind the cart abandonment/sales funnel dropoff % which would decrease by removing it *under certain user segments*). Extra points, accelerated status earning, future flight credit, profile completeness actions (cost saving for third party data), lounge passes, fast-track access, VIP treatment, partner value-adds.... there are no shortages of better solutions which could offer a much greater revenue return for QF (again - in certain demographics) than a straight up additional charge.

The lack of creativity effort to generate new revenue is mind boggling.

IMO the only way surcharging will go away is if we collectively refuse to support businesses which try the fee on for size.

 

[JohnK]

For now I will say good move. My first thought was if gift vouchers would be affected.

And those that think credit card surcharges (like fuel surcharges) are there to recoup costs are kidding themselves. Greed is the sole reason. There's no difference between an $89.00 airfare and a $90.15 airfare? It's just a number and easily incorporated into the base airfare.

 

[MEL_Traveller]

Under the new rules you're not allowed to blend VI/MC and Amex.

There would be a high number of international and premium cards which would bump up the acceptance rate, combined with travel industry higher fraud rates etc and it's probably not too far away from the actual hard transaction fee cost.

Thanks. Yes i guess that makes sense.

 

[moa999]

But they are blending seemingly.

At some point you do need a simple fee, rather than listing multiple rates for basic/gold/platinum/overseas etc.

For an Amex holder it's a good thing

 

[marki]

But they are blending seemingly.

At some point you do need a simple fee, rather than listing multiple rates for basic/gold/platinum/overseas etc.

For an Amex holder it's a good thing

It's still more cash in the pocket for Qantas on the whole

 

[Pleb Status]

Under the new interchange rules, the maximum interchange for any Australian issued MC/Visa is 0.8% (including all super premium) with a maximum average of 0.5%. QF will be charging 1.3% for these cards.

The maximum interchange for any Australian issued debit MC/Visa is 0.2%. QF will be charging 0.6% for these cards.

With the reduction in the cost to QF (as they will pay the banks less), QF will most likely be making more profit from the new fee system.

If the RBA needed any further proof that surcharges need to be banned completely, they need not look any further.

 

[samh004]

For me, probably mostly a good move, as I'm rarely spending $500+

 

[DeKa]

Under the new interchange rules, the maximum interchange for any Australian issued MC/Visa is 0.8% (including all super premium) with a maximum average of 0.5%. QF will be charging 1.3% for these cards.

The maximum interchange for any Australian issued debit MC/Visa is 0.2%. QF will be charging 0.6% for these cards.

With the reduction in the cost to QF (as they will pay the banks less), QF will most likely be making more profit from the new fee system.

If the RBA needed any further proof that surcharges need to be banned completely, they need not look any further.

Interchange isn't what a business is charged though - it's what one bank can charge another. The bank's margin could easily be another 0.5% to cover fraud, charge backs and so on.

 

[Pleb Status]

Interchange isn't what a business is charged though - it's what one bank can charge another. The bank's margin could easily be another 0.5% to cover fraud, charge backs and so on.

Is the merchant liable for fraudulent transactions on a CC or the bank who issues the card? I assume it is the bank and this is partly what the interchange fee pays for.

Charge backs only occur with the merchant does not provide a service and therefore it is the fault of QF if they receive any of these (and not the CC paying passenger to subsidise).

The CC surcharge should not be any more than what it would cost a business to accept cash for payment. Any costs that QF are liable for regardless of payment type should not be included in the calculation.

 

[medhead]

Is the merchant liable for fraudulent transactions on a CC or the bank who issues the card? I assume it is the bank and this is partly what the interchange fee pays for.

I'd guess it's much more likely that the banks charge their merchants a fee to cover fraud. Banks pay each other the interchange fee, and they charge their own merchants a card facility fee on top of the interchange fee. Therefore the interchange fee doesn't reflect the cost to the merchant of accepting cards.

Having said all that, why can't I pay Qantas with cold hard cash?

 

[Pleb Status]

I'd guess it's much more likely that the banks charge their merchants a fee to cover fraud. Banks pay each other the interchange fee, and they charge their own merchants a card facility fee on top of the interchange fee.

If this is the case, why should the normal CC paying customer pay for fraud (through elevated CC surcharges) which the QF system could easily reduce/eliminate with the appropriate systems and checks etc. I note that the QF website uses none of the more advanced fraud detection systems like MC secure code etc (even the JQ website does) which could reduce fraud costs significantly.

 

[moa999]

Having said all that, why can't I pay Qantas with cold hard cash?

Cash handling - offices, staff wages, security costs even more