Which? reveals processing fee rip off
September 30th, 2010 by elisa

A recent Which? report reveals household travel names such as Ryanair, Bmibaby, Easyjet, Monarch, Emirates and Thomas Cook Airlines (among others) have been hugely overcharging on credit card fees and says customers are being “ripped off” by the inflated processing fees. It adds that Irish Ferries and Brittany Ferries are also profiting from a £5 flat fee on credit card bookings.

Banks charge companies around 10p to process debit card sale yet companies routinely ask customers for £5 or more according to the report. Credit card processing also costs customers enourmously. Profiting from debit and credit card processing is out-lawed in many parts of Europe.

Banks will typically charge 0.8% of the value of the transaction of a credit card.

Bmibaby charges £4.50 per flight when bought with a credit card and £3 with a debit card; Ryanair requires £5 per flight booked for both booking methods; Monarch asks for 3.5 % on a debit card and 5% for a credit card booking and Easyjet charges £3.50 plus 2.5% (minimum £4.50) on a credit card transaction and £3.50 for a debit card booking.

Companies have previously blamed the high fees on the banks, but the Which? research shows it is just a diversionary tactic to boost profits.

“People don’t like card surcharges and it’s no surprise when the costs they pay don’t match those incurred by the retailer. There can be no justification for high card surcharges. While companies may want to recoup merchant fees, these charges need to be fair and transparent, so consumers know the real price before they begin a transaction.” said Which? chief executive Peter Vicary-Smith.

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