Card fee ban will hike holiday costs

The abolition of credit card charges threatens huge detriment to agents and operators, and will push up prices for all travel buyers, say industry leaders.

The warnings reflect growing alarm at the EU Payment Services Directive 2, due to come into force in January 2018, which bans retailers from recouping charges on credit card payments.

Advantage Travel Partnership managing director Julia Lo Bue‑Said described the ban as “a real blow”. Agents currently can charge up to 2% for credit card use, or £14 on a £700 booking.

Lo Bue-Said said: “When you’re a retailer you’ve no way of absorbing that cost. The impact will be significant and agents will bear the brunt.”

The Association of Independent Tour Operators warned of ‘huge detriment’ to the independent travel sector in a submission to a Treasury consultation, which ended this week.

Sunvil chairman Noel Josephides warned: “It will be very difficult for agents.”

He forecast the ban would drive up prices – negating the impact intended by Brussels. He said: “Those who don’t [currently] pay by credit card will be
penalised. No one can see where the saving is going to come [for consumers].”

He warned the costs of card use to the sector would rise if credit card use increases and card providers perceive increased risk.

Josephides said: “People have been singing the praises of credit cards because of the consumer protection. The numbers paying by credit card will rise without the fee.”

Treasury consultation documents back Josephides’ view, stating: “Merchants…would be expected to see a reduction in revenues…It is expected they will pass on the majority of the costs to
consumers through higher prices.”

The Treasury also suggests the EU has overestimated any consumer benefits because card charges have fallen dramatically since the directive’s drafting.

Abta has promised guidance for members.

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