The proposed outlawing of card payment surcharges would herald “an own goal” for the travel industry and its customers, Aito has warned.
Chairman Derek Moore said an anticipated ban on card charges would “seriously affect [the] livelihoods” of agents and operators and would mark a “backward step” for consumer confidence.
An axing of surcharges on most debit and credit cards falls under the Payment Services Directive 2 (PSD2) – EU regulation set to come into UK law by January 13, 2018.
A government consultation on whether to implement the legislation as it currently stands – including the ban on surcharging - was launched on February 2 and is due to end tomorrow (March 16).
Moore said Aito had been “burning the midnight oil” in order to send its response to ministers.
He argued that imposing a card surcharging ban would see “2% straight off the bottom line” of agents – a figure which he believed to be “vital to their survival”.
Moore also claimed that the price of holidays would have to increase as operators adjusted their prices to offset the loss of card surcharge fees, adding that there was “simply no way” for firms to absorb additional costs without raising prices.
“Once the government’s implicit encouragement to the general public to pay for more of their purchases by credit card is in action, holiday costs will of course go up because tour operators work on such slim margins," he said.
“This backward step is, Aito believes, to the definite disadvantage of the holiday-buying public and to consumers generally.
“It seems ridiculous that the government should be encouraging people to buy on the ‘never-never’, as credit was widely termed by our parents and grandparents. Are they trying to help our beleaguered banks by pushing more business their way?”
A poll of Aito members revealed that, based on the joint turnover of its 119 members totalling around £1 billion, and assuming that all payments were via credit card, card charges would amount to around £11 million per year.
“The credit card industry is likely to perceive a higher risk to them with more travel business going their way, meaning that they will probably charge holiday companies even more than they are at present," Moore continued.
“The impact of this move will mean that every consumer is adversely affected – even those who normally benefit from a lower price when choosing to pay by a debit card or cheque.
“The public will be by far the loser rather than the beneficiary as a result of this new regulation – the polar opposite, we are sure, of its instigators’ aims.
“This forced increase in prices will further fuel inflationary tendencies in the economy, already exacerbated by the fall in the value of sterling against the dollar and the euro.
“Does the Treasury really wish to score such an own goal?”