For a few years now, there have been numerous calls for the abolition of the credit card surcharges imposed by many online sellers just for the privilege of paying them even more money for their products. Those making payments online to companies such as Ticketmaster, Aer Lingus, Ryanair and others may find themselves subject to an extra charge of around 1.5pc to 2pc. Many holiday companies also impose these charges for consumers booking holidays online.
While the rules between the banks and retailers do not allow charges which discriminate against people paying by credit card, there is legislation allowing some surcharges, which means the matter is not clear cut which means in some cases retailers are perfectly entitled to add on handling fees.
The subject of this credit card charge is now the responsibility of the Irish Financial Services Regulatory Authority (IFSRA) since 2003, but still nothing has changed since then. The only comment I can find from them as a spokesperson saying: “The office is in discussion with the banks and we haven’t made as much progress as we would have liked.” He said the office would continue to press the banks with a view to eliminating these charges.
In 2003 it was quoted that of 63m credit card transactions, there were only 200 complaints related to this annually. So it’s not really a problem then? Or do people just accept that they’ve no choice but to pay the charges, and that there’s no point in complaining?
The helpful people at the European Consumers Centre said that if consumers agree to pay the surcharge, it is their choice. Excellent advice in a situation where these charges are levied on purchasing items online where there is little alternative.
In 2004, the Fine Gael party, via their Ripoff.ie website, called for IFSRA to abolish these credit card surcharges. A survey they did found surcharges ranging from 2% to 5%. In 2005, the Consumer Association of Ireland and the Irish Bankers Federation issued a joint press release calling for these charges to be dropped.
Now, in October 2006, this article in the Sunday Business Post brings alive the issue of the scrapping of these credit card surcharges. Unfortunately, there’s nothing new there, and it’s the same people making the same points.
Let’s face it; the credit card surcharge is a charge for convenience. We pay more in our local Spar for items instead of driving all that way to a larger supermarket, so isn’t it somewhat reasonable to pay for the privilege of not having to queue at the cinema for tickets, or to have the schlep all the way into town to buy concert tickets?
While I’d obviously be all in favour of getting rid of a charge that makes online purchasing cheaper, I think that it might be more realistic to ask that more realistic boundries be put on how these charges are levied.
It’s absolutely nuts to have to pay a surcharge on a per ticket basis to Ticketmaster since the administration overhead would be the same if I buy 1 ticket or buy 10. And it’s even more ridiculous to be paying these administration costs on a per ticket basis to airlines who are providing you with the facility of printing your own tickets. Where’s the administration there?
We’re told that these charges are to defray the “substantial costs” of processing credit and debit card transactions. Yet, these are all automated transactions that in all likely cost cents at a time, yet we’re paying large multiples of that. It would be interesting to see the profit that these companies make on credit card transaction revenue alone.
Finally, to show the ridiculousness of it all, some airlines doesn’t charge transaction fees on tickets bought for infants. Presumably though the same amount of processing is required in the background, so it shows the cynicism with which these fees are charged.
Why go for an all-out scrapping of this charge, which we’re most unlikely to be successful in getting? Maybe if we can ensure clarity and fairness in how these “convenience charges” are levied, it could be much fairer, with the companies still getting their money, but the consumers also having to pay less.