AFTA has addressed the Achilles heel of the travel industry in its recent submission to the Reserve Bank of Australia (RBA).
In response to their recent issues paper, Review of Card Payment System Regulation, AFTA’s submission looks to the many issues raised by the RBA in relation to the way credit card and electronic payments are made within the travel industry.
AFTA takes into account which areas could have a sizeable impact on a travel agent’s ability to recover the cost of merchant facilities, as well as outlining the challenges agents fact against chargebacks as a result of either collapse or failure of suppliers.
The last review of the electronic payment process was nearly 20 years ago, with AFTA welcoming the review by RBA to look at how consumer preference has changed.
“AFTA is tackling the Achilles heel of the travel agency community in our submission to the RBA Review of Card Payments Regulation,” AFTA’s chief executive Jayson Westbury said.
“Travel agents have a high risk of chargeback due to end supplier insolvency and therefore increased costs in providing credit facilities to customers. Despite this AFTA has found that the travel agent community still offers low and very competitive surcharge rates when compared to other businesses in the travel and tourism industry.”
AFTA has found that Australian travel agencies are now conducting 89% of their transactions using electronic payment systems.
Australian travel agents also have a minimum of approximately AU$5.4 billion in chargeback risk at any given time, increasing the risk profile of agents when seeking merchant facilities with banks and card providers.
“AFTA has a strong track record of prosecuting the case for the agency community and the latest submission does exactly that,” Westbury said.
“Any suggestion that surcharging is removed is completely unacceptable to the industry and further, any suggestion that complicates the transactions via credit cards is also rejected.”
A copy of the submission is available here.