Once the EU Payment Services Directive 2 is implemented on January 13, travel agents will no longer be able to pass credit and debit card fees onto customers, meaning many will face absorbing the fees themselves, though Abta has suggested agents could add a booking fee across all bookings, regardless of payment method, to recoup the money.
However Farina Azam, partner at Travlaw and TTG 30 Under 30 alumni, said that another solution proposed by Abta whereby agents could offer a discount to customers paying by bank transfer or cheque to encourage these lower-cost payment methods, might still contravene the directive.
“Abta guidance has said you can offer a discount or incentive, but I think that’s something to be wary about,” she said. “It’s open to debate, but in my opinion, to offer a discount for another payment method is just a credit card fee in another way.”
Azam also asked agents and operators to look urgently at their pricing of 2018 holidays, or risk having to take the industry-average hit of 2%.
“If you can set your own prices, you could increase your headline prices by 2% to take account of credit card fees, otherwise you will have to absorb it and take the hit,” she advised.
“Be warned that if you have taken a deposit for a holiday in 2018, and the balance is due after January 13, you will not be able to charge a credit card fee on the balance. Start looking at your pricing now.”
She advised that agents should also consider the wider implications of the new regulations. “Once [the credit card fee ban] is rolled out and consumers are aware of it, credit card payments are going to increase significantly,” she noted.
