Agents guide to payment surcharging
AFTA has released a statement to update agents on electronic payment surcharging.
An announcement was made by the Commonwealth Treasurer on October 20 that the Commonwealth Government intends to legislate a hard cap on surcharging.
While the details haven’t been made completely clear, AFTA is continuing to monitor all matters related to credit card surcharging to keep travel agents in the know.
It is important to note that The Treasurer has confirmed that any pending changes will not take place until early to mid-2016 and that the current credit card surcharging arrangements introduced by the Reserve Banks of Australia and Commonwealth Government continue.
The current cost for a business to accept payment by a credit card is highly complex, and the fees that a business is charged vary between different card types and card issuers like Visa, MasterCard, American Express and Diners Club.
The Commonwealth Government allows any business who accepts payment from its customers via a credit card to charge a surcharge that covers all fixed costs of accepting a credit card. The below information provided to AFTA members details the current standards on how a surcharges should be calculated.
Defining the responsible cost of acceptance?
- The surcharge must represent the direct cost of providing this payment option to the consumer. What is included in the surcharge?
What is included in the surcharge?
- The interchange fee: A merchant is charged an interchange fee for every payment it accepts from a credit or debit card
- The cost of maintaining the merchant terminal: This includes costs, for example the phone line, applicable insurance and bank fees charged to have a merchant terminal
- Fraud prevention: Businesses must ensure they are not facilitating a fraudulent payment. Therefore businesses may implement fraud prevention procedures and in some circumstances a business will be required to do so by the bank and card issuer
Travel agents have been recognised for providing competitive surcharging rates for Australian Consumers. AFTA’s recent survey of surcharging rates for Australian travel agents was between 2% – 4% depending on the card type.
These rates of surcharge indicate compliance with the current RBA guidance note.
Email the Travel Weekly team at traveldesk@travelweekly.com.au
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chargebacks need to be mentioned !!!!!!!!!!!!!!!