AFTA has made a submission to the Reserve Bank of Australia (RBA) in response to their recent issues paper Review of Card Payment System Regulation. The submission provides a comprehensive response to many of the issues raised by the RBA in relation to the way credit card and electronic payments are made within the travel industry. AFTA addresses areas which could have a sizeable impact on a travel agent’s ability to recoup the cost of merchant facilities and outlines the challenges that travel agents face against chargebacks as a result of the collapse or failure of suppliers.
AFTA has welcomed this review by the RBA, as the last review of the electronic payment process occurred nearly 20 years ago and the payment preference of Australian consumers has changed significantly. AFTA has found that Australian travel agencies are now conducting 89% of their transactions using electronic payment systems. It is estimated that Australian travel agents have a minimum of $5.4 billion (AUD) in chargeback risk at any given time, increasing the risk profile of agents when seeking merchant facilities with banks and card providers.
AFTA is committed to working with the RBA and other government departments to address the issues detailed in the submission for the betterment of the travel agent community.
“AFTA is tackling the Achilles heel of the travel agency community in our submission to the RBA Review of Card Payments Regulation. Travel agents have a high risk of chargeback due to end supplier insolvency and therefore increased costs in providing credit facilities to customers. Despite this AFTA has found that the travel agent community still offers low and very competitive surcharge rates when compared to other businesses in the travel and tourism industry,” said Jayson Westbury, AFTA Chief Executive.
“AFTA has a strong track record of prosecuting the case for the agency community and the latest submission does exactly that. Any suggestion that surcharging is removed is completely unacceptable to the industry and further, any suggestion that complicates the transactions via credit cards is also rejected,” Westbury said.