The airline duopoly has defended card surcharges, saying they give customers choice and keep prices low.
Australia’s major airlines have defended credit card surcharges and warned prices could rise if the controversial card fees are scrapped, after the nation’s biggest bank called for an end to the practice.
Currently, businesses can impose a surcharge – a fee paid by consumers for using the card payment system – but the amount must not be more than what it costs the business to use that payment type, which generally ranges between 0.5 per cent and 1 per cent of the purchase for Visa and Mastercard debit cards.
Virgin Australia said card payment fees let it keep airfares low. “If the ability to pass on card payments fees is removed, this may result in the cost of card acceptance being passed on to all consumers as higher prices,” the company said. Virgin said many of its customers choose to pay via credit cards to access additional benefits including loyalty points, insurance benefits, and fraud and purchase protections.But the country’s biggest bank, CBA, said a complete ban on surcharging would be the simplest outcome for consumers, in line with regions including the European Union, helping to wipe out the practice of excessive surcharging and the challenges of enforcing current standards.
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