Good news about credit card payments?

By | Category: Travel rumblings

Credit cardsBy the end of next year the government intends banning excessive/hidden fees charged by airlines (indeed by any company) where payment is made by credit or debit cards. On the face of it this is good news. Look deeper and it might be so great.
Why my scepticism?
Because some airlines don’t have charges for credit cards and debit cards. They have “administration fees” which may cover not only the actual processing fee charged by the credit card company but also the administration they undertake in submitting the payment to the processor. So when is a credit card charge not a credit card charge? Answer; certainly when it is charged by Ryanair.
For debit cards, commentators seem agreed the cost is only about 20p per transaction irrespective of value. For credit cards, the companies charge about 1.5%. (Why? Is there that much added complication from using a credit card or is this how the processors boost their revenue?)
I think passengers can expect definitions to change on airline, entertainment and retail websites. What was a credit card or debit charge will suddenly become a “handling charge” or a “processing fee.” Suddenly there will be website usage fees or some other “justified” expense like webpage scrolling fees, colour web page enhancement charges or analytical fare directory look-up rates. After all there are costs involved in providing this some will argue.
Could the government legislate sufficiently tightly so this won’t come to pass? It would be nice to think so but don’t be surprised if it doesn’t. I can see interpretations funding lawyers’ firms for some time to come as these fees make up a very useful dumping ground for companies to hide their so called fares. The EU legislation to do the same thing doesn’t come in until 2014. By then, governments might have enough experience to bring true transparency to the prices we pay.

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