Credit card companies won't cut frequent flyer points: Qantas CEO Alan Joyce

[SeatBackForward]

Credit card companies won't cut frequent flyer points: Qantas CEO Alan Joyce

Credit cardholders receiving Qantas frequent flyer points on their purchases should not expect a reduction in their earning rates as a result of the Reserve Bank of Australia's (RBA) review of interchange fees, Qantas chief executive Alan Joyce says.

The RBA is due to decide as early as Friday whether to cap the fees paid by merchants to credit card companies, in a move that many in the industry expect could lead to credit card companies offering fewer frequent flyer points per dollar spent.

But Mr Joyce, speaking at Qantas's 95th birthday celebration in Mascot on Monday, said the airline intended the amount of points earned on credit cards by its frequent flyers to remain consistent despite any changes to interchange fees.

"We're very comfortable in our position that loyalty is not paid out of the interchange fees," he said. "Loyalty is paid out of the whole profitability of the card. We're in dialogue with all of the banks about how we can continue to ensure we are comfortable with our position when it comes to loyalty."

More than 35 per cent of all credit card transactions in Australia, totalling $100 billion of annual spending, is placed on cards that earn Qantas frequent flyer points. The credit card companies purchase the points from Qantas Loyalty at a cost and then give them to cardholders. American Express cards, which have higher interchange fees, tend to reward customers with more Qantas points than rival cards from Visa and MasterCard.

Credit card companies won't cut frequent flyer points: Qantas CEO Alan Joyce

 

[moa999]

If interchanges are cut, whole of profitability of the card goes down

 

[eastwest101]

If interchanges are cut, whole of profitability of the card goes down

Yes - pretty obvious statement understood by most - except for Alan Joyce.

 

[Dr Ralph]

Credit card companies will do whatever suits their bottom line best.

 

[Cruiser Elite]

Prediction #1 - It's 19:20 here in MEL - I predict it will be dark within 2hrs!

Prediction #2 - It's Nov 16, 2015 here in MEL - I predict our CC purchases in total will earn substantially fewer FF pts of any persuasion within 2yrs!

Nostradamus or Nostranonsense?

 

[quokka77]

AJ is marking out his turf. He will have to fight the banks v hard if/when the interchange rate is reduced, and he will lose.

 

[Supersonic Swinger]

If interchanges are cut, whole of profitability of the card goes down

Or the profitability of QFF goes down...

 

[Doctore1003]

This was the lead story on ABC's "The Business" last night. It was interesting to hear that interchange fees for "premium" FF credit cards are up to 5 times higher than for other credit cards. Also, several hundred billion dollars are charged to FF credit cards each year in Australia - that is a lot of points!!