Just as politicians started taking the issue of false illness claims seriously, ministers delivered their response to the EU directive on card surcharging, along with the blow that they would be expanding it further to include American Express and PayPal.
“Rip-off charges have no place in modern Britain”, declared the economic secretary to the Treasury last week. And on the face of it, he was right. The government’s confirmation that companies will have to absorb fees rather than passing them on to consumers can only mean good news for customers.
"The removal of credit card fees was designed to make purchases cheaper – the reverse is now the more likely reality."
Gone will be the excess costs on our takeaways, our insurance payments and our airline tickets. The catch of course, is that if the consumer isn’t paying it, somebody else must. And in travel, such fees are significant. Consumers might pay 50p extra for their takeaway. For their holiday, they will likely pay £50 – at the very least.
For agents already coping with April’s rise in business rates and the costs of preparing for the Package Travel Directive, having to absorb credit card fees on top is one more headache to contend with. With package holiday prices set by operators, agents will have to swallow the additional costs out of their own commission.
Yes, agents could ban the use of credit cards, but if their competitor down the road still offers the option of using them, they could lose the booking. The best advice, says Travlaw, is to implement a universal booking fee, charging customers a percentage of their holiday price on all bookings, regardless of payment type.
The greatest irony is in what this will eventually mean for the consumer. The removal of credit card fees was designed to make purchases cheaper – the reverse is now the more likely reality.
