Can anyone tell me why an airline would change $30 because I paid for an international ticket on an AMEX card?

14 replies

crosscourt

Qantas - Qantas Frequent Flyer - Chairmans Lounge

Member since 01 Sep 2011

Total posts 91

Can anyone tell me why an airline would change $30 because I paid for an international ticket on an AMEX card? Is that not a bit OTT?

moa999

Qantas - Qantas Frequent Flyer

Member since 02 Jul 2011

Total posts 835

Because they have a flat fee...

It's an expensive fee on a $200 economy ticket to NZ at 15%. It's a cheap fee on $15000 first class ticket to New York at 0.2%.

And there are a number of ways to avoid it including using Poli and Vouchers

wilsoni Banned

wilsoni Banned

Qantas - Qantas Frequent Flyer

Member since 28 Sep 2011

Total posts 302

A flat rip-off. How many $200 tickets do they sell compared to $15000?

wilsoni Banned

wilsoni Banned

Qantas - Qantas Frequent Flyer

Member since 28 Sep 2011

Total posts 302

I've been told Poli is not as safe from hacking as credit card payments. $30 for that advantage is still a rip off.

eminere

Qantas - Qantas Frequent Flyer

Member since 25 Sep 2013

Total posts 371

Actually (and assuming we're talking about Qantas), trans-Tasman flights ex-Australia are treated the same as domestic flights as far as credit card payments are concerned; the fee is AUD7. All other international flights ex-Australia paid for by a credit card attract the AUD30 fee.

smit0847

Member since 30 Aug 2013

Total posts 148

Because they can. It's that simple. 

crosscourt

Qantas - Qantas Frequent Flyer - Chairmans Lounge

Member since 01 Sep 2011

Total posts 91

That I know but its just highway robbery.

Doubleplatinum Banned

Qantas - Qantas Frequent Flyer Platinum

Member since 07 Feb 2013

Total posts 431

You can whinge as much as you like it isn't going to change anything

The Evil Muppet

Virgin Australia - Velocity Rewards

Member since 16 Dec 2015

Total posts 12

There are a few reasons.

Accepting Scheme Card payments involves a number of costs:

  • The Merchant Discount/Merchant Service Fee can be anywhere between 0.3% and 3.0% depending on the card brand, card sub-brand (standard, premium, platinum and so on) and how well the merchant negotiates with their acquiring bank. In addition, there are often per-transaction fees involved in addition to the percentage charged.
  • Products where payment is well ahead of fulfillment (such as travel) typically attract a higher Merchant Discount/Merchant Service Fee due to the risk involved
  • Travel is an attractive market, and hence payment instrument fraud is rife for Scheme Cards. The cost of addressing such fraud is not trivial.
  • Accepting Scheme Card payments requires compliance with PCI DSS. This requires either that the airline is PCI DSS compliant (potentially very expensive) or that the airline uses a PCI DSS-compliant provider (additional costs per transaction) or a combination of both. 
All of these costs add up. Scheme Cards (this covers Credit, Debit and Charge products) are all designed around the cardholder's rights and thus there are specific requirements on merchants when it comes to accepting such payment instruments. 

dimi

Qantas - Qantas Frequent Flyer

Member since 13 Jul 2012

Total posts 150

Indeed...

Though somehow airlines in the rest of the world don't seem to realise how terribly expensive those credit card payments really are...

I guess I'll take the "Because they can" answer as more plausible...

TheRealBabushka

Member since 21 Apr 2012

Total posts 2,059

Businesses will charge whatever amount they can get away with. Marketing 101: Price charged is not a function of cost.

Any failure to address the disconnect between what is charged and the value received (convinience of a payment system) is down to:

  1. A lack of adequate and appropriate competition in the market, or
  2. A failure of the regulatory authorities, in cases where the market demand cannot support effective competition.

I do not understand why in Australia, the regulators are not doing more to eradicate fees altogether. No one has convinced me of the argument to maintain fees for credit card transactions or the amount charged.  

crosscourt

Qantas - Qantas Frequent Flyer - Chairmans Lounge

Member since 01 Sep 2011

Total posts 91

Its pretty amazing. Its not as if someone is there physically processing the transaction. Its not as if it involves the cost of one of the old paper tickets. It's not as if its covering the cost of postage etc. Its just a rip off.

Chris_PER

Virgin Australia - Velocity Rewards

Member since 19 Feb 2014

Total posts 90

Because it's a rort, nothing more or less.

crosscourt

Qantas - Qantas Frequent Flyer - Chairmans Lounge

Member since 01 Sep 2011

Total posts 91

Oh no doubt and nothing will be done about it. ACCC should be looking into this just like the check into other credit card fees. This is a cash cow.

jchen

Member since 11 Jun 2013

Total posts 9

Actually its the RBA that sets the credit card interchange fees and whether the surchage can be passed onto the customers. A few years back they changed the rules to allow the merchants to charge whatever they want to the customer for the use of credit/debit cards.

The ACCC is more concerned about drip pricing and whether fee-free options such as BPay and Poli are provided to customers.

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