A recommendation by the Reserve Bank of Australia (RBA) to abolish the ability for businesses to issue surcharges on eftpos and credit cards has been labelled “inherently unfair” by House of Travel Chief Operating Officer Grant Campbell.
Speaking with travelBulletin about the RBA’s policy suggestion released yesterday, Campbell said that accepting credit card payments imposes a direct and unavoidable cost on businesses.
“It is inherently unfair to restrict businesses from recouping these costs when they are a direct consequence of the payment method chosen by the consumer,” he explained.
“For travel advisor businesses, which typically operate on tight margins, the ability to recover these costs is especially critical.”
Campbell also noted that such a change would disproportionately impact travel advisors, in that transactions often extend into the thousands of dollars.
“This context is critical as card fees can be a high cash value as a result, which would heavily impact the feasibility of some travel advisors if they had to absorb them – this is not comparable to paying a few cents as a card fee for a coffee.”
ATIA labelled the RBA proposal “deeply disappointing”, warning such a move could lead to higher consumer prices and reduced travel advisor services.
Helloworld Executive Director Cinzia Burnes described the abolition of surcharge fees as “simply not feasible”, as they will inevitably be passed onto clients in other ways.
“Attention should be focused on the banks and financial institutions that impose these fees,” Burnes said.
“If there is to be a reduction in credit card and Eftpos surcharge fees, it must be matched by corresponding cuts in bank fees and interchange fees, otherwise it is the small business owners who continue to shoulder the cost.”
Meanwhile, Luxury Escapes CEO Adam Schwab took to LinkedIn to share his dismay with the decision, describing the move as secretly “screwing over everyone”.
Customers currently choose to pay a fee to use cards due to their convenience and their value, which Schwab said he is happy to cover with small surcharge.
However, the RBA should enforce existing rules to ensure businesses do not profit from excessive surcharges, “which is abhorrent and absolutely must be stopped”.
“The RBA’s decision will hurt businesses who don’t profit from fees and inevitably harm consumers who will pay more in interest or higher card charges or in businesses simply charging more,” Schwab pointed out.
“The notion that banks or schemes will happily accept reduced profits shows a pitiful understanding of capitalism.”
“This continued stupidity is certainly not out of character from a taxpayer funded organisation that has spend almost two decades shafting young people by creating the world’s largest housing bubble,” he fumed.
