NEWS TRAVEL WEEKLY BUSINESS CONTINUED FROM THE BACK
common standard across the industry. Why not at Ryanair?” Philip von Schöppenthau, ECA secretary general, claimed: “The airline is reverting to previous anti-union tactics while claiming to engage with unions.” The International Transport
Workers’ Federation (ITF), which represents cabin crew, warned Ryanair to “expect further strike action over the summer if it continues to ignore the legitimate demands of its workers”, and Spanish pilots’ union Sepla warned: “This unrest is only beginning.” It’s all a far cry from last December when Ryanair announced it would recognise unions for the first time. The ITF suggested: “Since then, there have been no concrete improvements in pay and conditions.” British airline pilots’ union Balpa suggested: “Ryanair is still coming to terms with dealing with trade unions.” Union complaints centre on
Ryanair’s refusal to employ staff under local laws with the accompanying rights and benefits. For example, Spanish cabin crew union SITCPLA alleges Ryanair crew need an EU health insurance (Ehic) card to access medical treatment in Spain even when Spanish residents. Ryanair chief executive
Michael O’Leary forecast “further strikes over the peak summer” when he reported the airline’s quarterly results last week. O’Leary insisted: “We’re not prepared to concede to demands that will compromise our low fares.” The carrier blamed a 20% fall
in profits partly on increased staff costs, “primarily due to pilots’ 20% pay increase”. Yet it still reported €319 million in profits for the three months to June and forecast full-year profits of €1.35 billion.
Card payments regulator to review acquirers’ fees
The Payment Systems Regulator (PSR) has announced a review of card-acquirer services following retailers’ complaints about the rising costs of card payments.
The PSR published draft terms
of reference for a “market review into the supply of card-acquiring services” last week. This will examine how merchants, including agents and operators, buy card-acquiring services, “the fees merchants pay” and whether there are “credible alternatives”. Abta is among the organisations
to have sought a review following the abolition of card transaction fees in January under the EU Payment Services Directive II (PSD2). This banned charges on consumer card payments. However, the fees banks charge on credit card payments, which can be 2% of a transaction’s value, have failed to fall. Fees for debit- card transactions have also risen. ‘Interchange fees’, levied
between banks, make up the largest element of these charges. Mark Tanzer, Abta chief
executive, told Travel Weekly in June: “The promise was that
EU rules fail to cap fees charged by card acquirers
The EU’s Interchange Fee Regulation (IFR) sits alongside the EU Payment Services Directive (PSD2) and was meant to reduce the costs of card payments for merchants. It capped interchange fees on consumer debit and credit-card transactions and set out rules for applying these. However, the IFR did not cap the fees merchants pay to card acquirers. It assumed
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travelweekly.co.uk 2 August 2018 CARDS: The cost of card payments has failed to fall since PSD2
interchange fees would come down, but they haven’t. That is a real hit to our members – 2% of the cost of a transaction can be 20% of an agent’s revenue [on a booking].” The British Retail Consortium
(BRC) described the increase in the cost of processing card payments as “alarming”. Andrew Cregan, BRC policy adviser on payments and consumer credit, said: “Retailers spend £1.1 billion a year on accepting payments – the vast majority of which goes to the card payments industry – and card
competition between acquirers would limit any tendency to raise fees. This has not happened. Card acquirers provide card
payment-processing services to merchants such as agents and tour operators. Card issuers supply credit and debit cards to consumers. Both issuers and acquirers work with card-scheme operators such as Mastercard and Visa. The Payment Systems Regulator (PSR) notes: “Interchange fees typically make up the largest portion of fees merchants pay. So the harm to smaller merchants… could be significant.”
scheme fees are spiralling.” The PSR noted the “concerns
about the costs of card payments [and] acquirers holding on to savings made from interchange fee caps.” It said: “Some merchants, especially smaller merchants, are suffering significant harm.” The review will focus on
Mastercard and Visa services, which account for 98% of UK debit and credit card payments. However, there is little hope of a speedy outcome as the review is not likely to be completed before mid-2020.
The PSR’s review will consider: l Acquirers not passing on the savings they make from the cap on interchange fees.
l A lack of transparency on the fees merchants must pay.
l Barriers “making it hard” for merchants to compare and switch card acquirers.
l The fees card-scheme operators charge to acquirers (‘scheme fees’), and the rules they apply.
l The “significant” increase in the scheme-fee portion of fees merchants pay.
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