Airline Qantas overhauls credit card booking fees

Qantas is to eliminate its ­arbitrary credit card surcharges, replacing them with a flat ­percentage fee.

The changes are likely to ­benefit Qantas passengers flying economy.

Qantas passengers at the back of the plane are set to save a few dollars when buying tickets as the airline eliminates its ­arbitrary credit card surcharges and replaces them with a flat ­percentage fee.

Qantas currently charges a $2.50 fee when customers use a debit card to buy domestic or trans-Tasman tickets and a $10 fee for international flights. Purchases made on credit cards attract a $7 surcharge on domestic and tran-Tasman flights, while international tickets come with an extra charge of $30.

But from September 1, Qantas will move to a 0.6 per cent fee for bookings made with debit cards and a 1.3 per cent charge for credit cards. Domestic and tran-Tasman tickets will come with a maximum cap of $11, while the most passengers will pay on international flights will be capped at $70. The changes mean that for an average domestic return fare of $400, the fee would be $5.20 — compared with the present flat fee of $7.

For an average international return fare of $2000, the fee would be $26 — compared with the current flat fee of $30.

“This gives passengers certainty about the maximum they’ll pay before they start booking and is in line with Qantas’s consistent position that it doesn’t profit from card payment,” a Qantas spokesman said.

“The majority of Qantas customers will pay the same or less in fees than they do under the current system, and there’ll continue to be low-fee and fee-free options for customers who prefer not to pay with a credit card.”

The changes are likely to ­benefit passengers flying economy, but business and first-class flyers near the pointy end of the plane will end up paying double the fees they used to for international flights. A Sydney-Singapore business class return flight with Qantas, for instance, now attracts a $30 booking fee. For an average fare of $6000 for a business ticket, the changes will more than double that surcharge to the $70 maximum.

Virgin Australia and Qantas budget carrier Jetstar are still reviewing how they will revamp credit card surcharges.

The changes have been made in line with the RBA’s surcharge reform, passed by the Senate in February, to ensure retailers only charge customers for the “reasonable cost” of accepting electronic payments.

The Australian Competition & Consumer Commission has been given special powers to penalise institutions charging surplus surcharges for card ­payments. The changes came about after the federal government’s Financial System Inquiry received more than 5000 submissions complaining about ­surcharges. Consumer advocates have welcomed the crackdown, which it is hoped will rein in some of the $1.6 billion Australians pay in surcharges each year.

Airlines were among those most complained about in the submissions, especially after consumer watchdog Choice ­estimated Qantas was reaping $100 million more than its cost of accepting card payment.

But Qantas maintains it makes no money from surcharges and only recovers about 80 per cent of the cost of credit and debit transactions.

The changes have also seen debit card surcharges dropped from 12c to 8c per transaction.