COMMENT IN MY OPINION
The chancellor, Philip Hammond, announces his Budget this week
against the extremely challenging political and economic backdrop of Brexit, rising inflation and sluggish economic growth. A major area of interest for the travel
industry surrounds the chancellor’s decision on Air Passenger Duty. Abta, along with our partners in the ‘A Fair Tax on Flying’ campaign, has called for a minimum 50% cut to boost the UK economy as we prepare to leave the EU. The government’s claim it is building an outward-facing “Global Britain” will continue to ring hollow as long as we have a rate of air tax that is at least double that of our nearest competitors. However, alongside APD, Abta’s submission to the chancellor ahead of the Budget also raised another important matter for the travel industry: the high cost of taking credit and debit card payments and the forthcoming ban on surcharging for taking consumer payments.
Card challenge We know from our discussions with members that this is a very significant challenge facing the industry, especially the agency community. It is time the government woke up to the reality that inaction in this area is damaging business, especially small and medium-sized enterprises. HM Treasury’s response to the recent
consultation, confirming the ban on surcharging is to come into effect on January 13, acknowledged that part of the problem is the failure of government
Help us play our best hand with the chancellor
Strengthen Abta’s case in card payment talks with Hammond
LUKE PETHERBRIDGE SENIOR PUBLIC AFFAIRS
MANAGER, ABTA
to enforce effectively the previous regulation designed to reduce the cost of taking card payments. This comment relates to the Interchange Fees Regulation, introduced in 2015. The regulation significantly lowered the cost of taking credit card payments but, as a result of debit card fee changes, seemingly failed to reduce merchant service fees overall in the way expected by policymakers. The Treasury has promised to consult with businesses on card payments in the months ahead, and we will be applying pressure to see that this happens. Abta will now be working with members, and the wider industry, to prepare for these talks, and to ask the government to look again at this area. We believe there is a need for the regulator to instigate a market study to examine more closely the fees charged by acquirers and banks, and whether these can be justified as reasonable and proportionate. To get this result, we will need to build an evidence base to show what has
happened with card payments in the industry in recent years, and to outline the cost of regulatory failure. Abta will be launching a member survey in the coming weeks, which we will publicise widely. We understand this is a very busy time of year, but your responses to this survey will be vital.
Shop around In the meantime, our advice to members remains to shop around to ensure the best deal on merchant services, and to read Abta’s guidance on debit and credit card payments. This guidance is updated regularly as we continue our discussions with government, and we will be outlining the options available to agents, such as incentivising payment by other methods, as the new regulations come into force.
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TRAVELWEEKLY.CO.UK
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travelweekly.co.uk 23 November 2017
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