Qantas is switching from charging a fixed fee for bookings paid by credit card to charging a percentage fee, bringing it into line with new rules imposed by the Reserve Bank of Australia.
For most Qantas customers, the new deal will save them money.
Back in May, the Reserve Bank of Australia Payments System Board (PSB) published its Standard which relates to surcharges by merchants when charging customers for the use of a credit or debit card. Surcharges will be deemed excessive where they exceed the permitted cost of acceptance, as defined in the Standard.
The Standard defines a “large merchant” as one that meets at least two of the following requirements: it has a consolidated gross revenue of AUD 25 million or more, the value of its consolidated gross assets is AUD 12.5 million or more, or it employs 50 or more employees. Qantas falls into all of those categories.
Qantas has up till now charged AUD 7 per credit card booking for domestic flights, and AUD 30 per credit card booking for international flights. It will now charge customers using credit cards 1.3% of the booking value. Surcharges for domestic flights will be capped at AUD 11, and surcharges for international flights will be capped at AUD 70.
David Newington, country manager Australia at the business travel payment solutions provider AirPlus International, said several weeks ago that the reforms were “good news for consumers, who can expect a reduction in their travel costs”. That seems to be the case.
An analysis by Angus Kidman at finder.com.au reiterates that for most passengers, the reforms mean lower fees.
“If your domestic (or trans-Tasman) fare is $539 or less, you’ll pay less than the current $7 figure,” Kidman writes. “Above that, you’ll pay more. At $846, the $11 cap kicks in.” For his full article click here.
Internationally, booking any fare under AUD 2309 will be cheaper under the new Qantas scheme. Above that, customers will pay more – so business class bookings and other travel in the pointy end of the aircraft could be affected, although the AUD 70 cap enters the scene at $5385.
To avoid the surcharges, customers may choose to use a debit card (including the Qantas Cash travel card), BPAY (at least seven days in advance) or the POLi bank payment system.
Low-cost carriers like Tigerair and Jetstar, with finer margins than Qantas, now have to work out what they will do to comply with the new regulations.
Written by Peter Needham