AFTA reviews the weakness in travel industry

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.

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Latest comments

Kim Simpson says:
April 29, 2015 at 1:13 pm
If someone could explain this to AMEX that would be fabulous and then maybe they will reduce their ridiculous Credit Card surcharge. I’ve tried time and again to get them to reduce it but they say they won’t for travel agents. Considering so many people want to pay by AMEX but baulk at the 3% fee AMEX aren’t doing themselves any favours as people turn to other credit cards for payment that have lower fees. No way can I absorb 3% fees on a booking, that’s just ridiculous.
AMEX don’t like you passing on the fees either, I got a real telling off when I told them I passed on the fees.
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- AUSSIEtraveller says:
  May 14, 2015 at 12:17 pm
  Paypal charges the same amount for Amex, Visa & MasterCard. Think we pay 2% but could probably get it lower, as we discourage taking cards (been thru Sept 11, Ansett, Canada 3000 & other airline collapses & seen many agents lose their houses with chargebacks) Make sure you pass on any credit card charge in full + maybe add in a bit for “chargeback insurance”.
  There’s probably going to be another airline or 2 go under this year & maybe a big one, so get your assets into your spouses name or family trust or some other entity that very dodgy banks can’t touch.
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