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NEWS 1


The EU ban on credit card fees starts on Saturday


YOU NEED TO KNOW


VOTE NOW! What’s your tactic?


There may not be a single solution that is being adopted industry-wide, but here are some of the ideas suggested to offset the extra costs incurred for payments made by credit card from Saturday:


l Stop taking credit card payments


l Sell operators offering higher commission


l Sell more ancillaries


l Absorb the costs and increase prices or sales


l Offer ‘freebies’ for alternative payments


l Charge a booking fee


Agents seek solutions as credit card fees ban starts


Travel Weekly reporters


Agents were still unclear this week how to legally incentivise customers not to use credit cards ahead of a ban on card payment fees from Saturday.


Experts disagree over whether


government guidance issued in December sheds light on how non- financial incentives, such as airport lounge access, can be offered. This is one way agents have


been told they could mitigate the impact of the EU Payment Services Directive 2, which outlaws card fees and becomes law on Saturday. Agents have typically been


charged 2% for card transactions and there are concerns the new law will seriously impact profits. Farina Azam, partner and head


of commercial at Travlaw, said it was a “shame” new government guidance did not provide clarity. “Agents can’t offer discounts


for paying by an alternative method,” she said. “But we want clarity on whether they can offer non-financial incentives without increasing the headline price.” However, Abta said the guidance


was clear and companies can offer non-financial incentives to encourage people to use payment methods other than cards. The association’s own guidance


says agents have “different options” and should choose “whichever approach suits their business and customers”. The Advantage Travel


Partnership has issued a guidance document for members. It says there is “no silver bullet” but offers


4 travelweekly.co.uk 11 January 2018


“Agents can’t offer discounts to customers for paying by an alternative method”


advice on protecting margins, such as selling more add-ons, charging booking fees, negotiating rates with banks or “incentivising different payment methods”. More than 20 operators have


now boosted commission by 0.5% to help agents stomach the costs. Aito Specialist Travel Agents chairman Gemma Antrobus said many agents were hoping to discourage clients from paying balances, if not deposits, by credit card. Her agency, Haslemere Travel, has not adopted the policy but has removed references to


l Renegotiate merchant fees or switch bank


l Save money elsewhere in efficiencies


What will you be doing? Vote in our poll at:


go.travelweekly.co.uk/poll


credit card payments from its website, payment reminders and confirmation forms. “We will still accept credit cards


but are encouraging clients to pay by bank transfer,” she said. Tony Mann, director of Idle


Travel in Bradford, has factored in the extra “quite a few thousand pounds” of costs for six months. His staff are plugging interest-


free direct debit payment plans, which “weren’t pushed before”. He said these were “reducing cancellations” and “helping cash flow”. Idle Travel is also trying to sell more extras. Miles Morgan Travel managing


director Miles Morgan forecast “a huge increase” in credit card payments as consumers realise the benefits. He said: “Just get on with it and generate income to cover it.”


PICTURE: SHUTTERSTOCK


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