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Plastic air discounts could be on the horizon

The Reserve Bank of Australia (RBA) has put forth a new idea that would see a drop in airline booking fees on credit card bookings by up to $15 per flight.

The Reserve Bank of Australia (RBA) has put forth a new idea that would see a drop in airline booking fees on credit card bookings by up to $15 per flight.

 

In a discussion paper on RBA’s website, the group says it has been floating around with the idea to discount booking fees for travellers who pay using a credit card.

The saving would come from a ‘low fixed-dollar amount’ cap on payments made by plastic, News.com.au reported.

“In the case of the airlines, the current fixed-dollar surcharges would appear to be well above the reasonable cost of card acceptance for low-value fares.”

Reserve Bank of Australia

For example, the RBA says a customer booking a return domestic fare will pay surcharges from $2.50 to $17 for debit cards. Those paying with a credit card will be stuck with fees between $7 to $17.

The group says this implies surcharges of up to 8.5 percent on a $200 return fare.

discount

Of the airlines flying domestically, Tiger and Jetstar have the highest standard surcharge per return ticket, with booking service fees of up to $17.

The RBA said there’s concerns that the air sector is susceptible to excessive surcharging and suggested modifying the surcharging standard to allow credit card companies to cap surcharges that “are not percentage-based at some low fixed-dollar amount”.

“This could result in a significant reduction in surcharges payable on lower-value fares.”

Reserve Bank of Australia

According to News.com.au, consumer group, Choice believes airlines wouldn’t adhere to a fixed-dollar cap even if it were introduced.

The group’s spokesperson told the website that they don’t have ‘faith’ that a change in rules would make big companies ‘do the right thing’.

“We need a regulator to step in and enforce the rules.”

Tom Godfrey, Choice spokesperson 

This isn’t the first time the RBA has made a pitch for a limit to payment surcharges. In 2013, the group introduced a ‘reasonable cost acceptance’ on booking fees, which was ignored.

The ‘reasonable cost’ introduced by the Reserve Bank was $2 on a $200 return journey.

Would you like to see a plastic discount on air booking fees?