International Card Payment Fee increasing

[serfty]

Air New Zealand charge "Australian" (airnewzearland.com.au) bookings $8 for Oz to NZ itineraries, $6 for domestic NZ itineraries and $20 for other international itineraries.

None of these are charged for bookings made "in NZ" (airnz.co.nz).

 

[jsd]

Hmmm, looks like the $25 AUD fee has been around since Apr. 2009

Please note that from 1 April 2009, all bookings originating from Australia will have a credit card processing fee of AUD 25 per ticket. This fee will be part of the fare component "Carrier Surcharges".

 

[oz_mark]

Are you sure? I bought an SQ ticket last week and there was no CC surcharge for me.

Airline Fuel and Insurance Surcharge(YR) was $25.00

YR is the CC surcharge. You don't really see it as there is no option to pay any other way, so it is included in the total from the get go.

 

[Alanslegal]

Hmmm, looks like the $25 AUD fee has been around since Apr. 2009

The big difference with SQ is that the $25 fee is already included in their price quote and not on the payment confirmation page that QF does.

So imagine - same fare, same condtions - SQ quoting $1000 vs. QF quoting $990. Then at the payment page, SQ is $1,000 vs. QF which is now $1,020!

 

[Austman]

This is how my SQ ticket was priced:

Carrier Surcharges

Carrier Surcharges include the following:
Airline Fuel and Insurance Surcharge(YR) AUD 25.00
Airline Insurance(YQAD) AUD 20.80
Airline Fuel Surcharge(YQAC) AUD 200.60
Total Carrier Surcharges AUD 246.40

So maybe it's the first one? It made no difference if a credit or debit card was used.


Edit: It was YR! ... a bit misleading but here it is:

A CREDIT CARD SERVICE FEE -CCSF- OF AUD25 APPLIES PER TICKET PAID FOR USING A SQ ACCEPTED CREDIT CARD.THE CCSF MUST BE SHOWN ON THE TICKET USING TAX CODE YR.THE CREDIT CARD SERVICE FEE IS NON-REFUNDABLE.

 

[oz_mark]

The big difference with SQ is that the $25 fee is already included in their price quote and not on the payment confirmation page that QF does.

That is because you cannot avoid the fee on SQ, while you can avoid the fee on QF. You CAN purcahse the Qantas fare for $990.

 

[serfty]

... I made a FF redemption booking a couple of months ago SYD-HKG, fees and taxes came to about $140, $25 of which was a CC fee. That equates to about a 21% credit card service fee!

That's rather strange.

Qantas do not charge an ex Oz CC fee for classic award bookings online; neither international nor domestic.

 

[Stephen65]

The ATO levies these surcharges if you pay your tax by CC:

visa/MC - 0.65%

Amex - 1.25%

The ATO website states that these are the actual fees incurred by them. I think that gives you a good idea just how little a large organisation actually pays.

 

[nonscenic]

Is the other reason airlines charge a credit card fee so that they can make it more attractive to pay by BPAY / Direct Debit etc, where the money is more "concrete". For example, when Ansett collapsed, people who had paid for tickets with credit cards were able to obtain cashbacks from their credit card companies. The percentages credit card companies charge merchants varies not only according to turnover but on the credit card provider's assessment of risk of default by the merchant (airline).
If airlines charged transparent credit card fees (ie as percentages) then it might give an indication of what the banks think about their comparative credit-worthiness. It seems a strategy of the airlines to charge a flat fee which relatively penalises the cheap fares / domestic end of the market, making it more tempting for the more price sensitive customers to pay "hard cash" which is less refundable.

With many credit cards having some form of travel insurance, it might also be that the merchant fees (expressed as a percentage) to airlines is markedly higher than the "safer" transactions to the ATO. After all, who would get their bank to seek a cashback from the ATO?

 

[dundas]

Qantas don't charge credit card fees in all markets - but they do in Australia, where they seem to have pricing power.

My attitude to these things: Qantas have a right to charge what they like, and if I don't like what they charge, I have the right to take my business elsewhere.

The same principle applies with credit cards - why use a major bank credit card when a Mastercard clear advantage card (or whatever it's now called since the rebranding) charges no foreign exchange transaction fees at all?

It's my money, and it's my choice.

 

[NM]

Is the other reason airlines charge a credit card fee so that they can make it more attractive to pay by BPAY / Direct Debit etc, where the money is more "concrete". For example, when Ansett collapsed, people who had paid for tickets with credit cards were able to obtain cashbacks from their credit card companies. The percentages credit card companies charge merchants varies not only according to turnover but on the credit card provider's assessment of risk of default by the merchant (airline).

I think its just because they can. Airlines like Qantas have been major drivers in use of credit cards in Australia through the addictive nature of their "loyalty" programs. Airlines in particular have a customer base wanting to use credit cards because they earn FF points by spending. So the airlines have built the "demand" to use credits cards (FF points addiction) and then slap on a surcharge for doing so. The Reserve Bank reforms a few year back allow merchants to recover reasonable costs for process transactions, so the airlines are using this as their justification for the charge. They only provide the BPay option as justification for being able to charge for using a credit card. They encourage the use of credit cards through their FF program.

 

[anat0l]

None of these are charged for bookings made "in NZ" (airnz.co.nz).

That is going to change very soon.

 

[coyote25]

After all, who would get their bank to seek a cashback from the ATO?

Maybe Hoges tried?

 

[one9]

In Defense of Qantas, one thing that most people are forgetting is Credit Card Fraud. Credit card fraud costs money and may be up to another 1% cost to Qantas for users who pay by credit card. Unlike fraudulent credit card payments, fraudulent BPAY payments are not reversed (the bank loses) so is only fair that they are cheaper.

Most airlines suffer from credit card fraud, and many other airlines add great inconvenience to the ticketing process when you book online with a credit card. eg.
* Cebu Pacific - Made me fax copy of credit card & ID
* Singapore Airlines - Made me present the credit card at checkin
* Thai Airlines - Made me goto their office to purchase award ticket rather than online as I was not the traveler.

I agree that the way the Qantas credit card surcharge operates is not fair - for example when I book an award booking, I must pay the credit card surcharge of $30 on a tiny tax amount. The way is much more beneficial for first & business class passengers. But whilst it is not fair, after considering all the costs of bank charges & fraud costs & administration costs involved in responding to credit card disputes, I don't believe Qantas make as much profit out of it as many people believe.

 

[Mal]

In Defense of Qantas, one thing that most people are forgetting is Credit Card Fraud. Credit card fraud costs money and may be up to another 1% cost to Qantas for users who pay by credit card. Unlike fraudulent credit card payments, fraudulent BPAY payments are not reversed (the bank loses) so is only fair that they are cheaper.

This is no excuse for Qantas. Qantas has CHOSEN to make things simple for credit card users (by not implementing in Australia certain restrictions like present credit card at check-in or issuer anti-fraud features like "Verified By Visa" and "Mastercard Securecode"). Also, there is lead time between when a ticket is purchased and used, so the fraud could be detected in that time.

Fraud isn't an excuse for Qantas to charge excessive fees.

 

[one9]

This is no excuse for Qantas. Qantas has CHOSEN to make things simple for credit card users (by not implementing in Australia certain restrictions like present credit card at check-in or issuer anti-fraud features like "Verified By Visa" and "Mastercard Securecode"). Also, there is lead time between when a ticket is purchased and used, so the fraud could be detected in that time.

Fraud isn't an excuse for Qantas to charge excessive fees.

My point is that if Qantas want to make the credit card surcharge the absolute least possible, then they would also need to add inconvenient restrictions like the other airlines. I personally would prefer to pay a bigger surcharge than to have restrictions like having to goto Qantas offices or agents whilst overseas or fax copies of my credit card.

 

[serfty]

That is going to change very soon.

Yep - that post was three weeks ago.

Still NZD2/5/10 (Initially?) won't hurt as much at QF charging (AUD7.70/7.70/30)*.

*The QF T-T charge is actually higher than the Domestic charge as there is no GST component.

 

[anat0l]

My point is that if Qantas want to make the credit card surcharge the absolute least possible, then they would also need to add inconvenient restrictions like the other airlines. I personally would prefer to pay a bigger surcharge than to have restrictions like having to goto Qantas offices or agents whilst overseas or fax copies of my credit card.

So is QF a bigger target of fraud or is the fraud getting worse? Because not only do QF have one of the highest said charges in Australia (indeed, the world), but it is increasing!

 

[anat0l]

Yep - that post was three weeks ago.

Still NZD2/5/10 (Initially?) won't hurt as much at QF's charge.

Yeah it doesn't hurt much (although it's NZD 20 for an international return booking or RTW, because it's charged per journey).

But NZ has never had these charges for a long time, and there was a clause on their website claiming that they never would do such a thing when others did. A lot of customers liked this thing about NZ (so did I, if only they let you earn Airpoint Dollars on cheap fares). Now a good number of those customers are screaming murder.

 

[Flashback]

This is no excuse for Qantas. Qantas has CHOSEN to make things simple for credit card users (by not implementing in Australia certain restrictions like present credit card at check-in or issuer anti-fraud features like "Verified By Visa" and "Mastercard Securecode"). Also, there is lead time between when a ticket is purchased and used, so the fraud could be detected in that time.

Fraud isn't an excuse for Qantas to charge excessive fees.

As opposed to the UK where *every* transaction I do online redirects me to a VBV page.