Last month I wrote a post about the legitimacy of card payment fees. I looked at the payment fees charged by some of the major low cost airlines and compared them to the actual costs the airlines may have.
It came as no surprise to me to find out that I was not the only one making such calculations. The Which? magazine, for example, filed a super complaint against the airlines that charge travellers high commissions for debit and credit card payments. The Which? argued that the debit card payment fees that low cost airlines have to pay are generally much lower than 1 pound per transaction (which is what I was also stating in my previous post). The costs of processing credit card payments are higher, but they do not exceed 2% of the actual transaction value.
This complaint was upheld last week by the Office of Fair Trading (OFT), which called for an end to the debit card surcharges imposed by travel companies. This is a big step forward, as these payment fees are often added at the very last stage of the ticket purchase. EasyJet charges customers £8 per card transaction as the eighth and last step of the booking process, while Ryanair adds £6 to the cost of the flight tickets at the end of four booking steps.
The first airline to comply with the OFT request was Monarch Airlines. They have already scrapped the 3.5% fee they used to charge for debit card transactions.
Other airlines insist that these fees are optional, as they offer alternative “commission-free” payment methods. Easyjet does not apply a payment fee to the purchase if you pay by Visa Electron, while Ryanair doesn’t charge you extra only if you use a pre-paid MasterCard. While, theoretically speaking, one could use these payment methods, in reality few people have these types of debit cards nowadays.
Although the OFT may succeed in enforcing these new measures, the airlines will probably think about new hidden taxes to add to the fares they advertise during the booking process. So we may win this battle, but the main problem – the fact that customers are being misled – remains.