The Australian Federation of Travel Agents is tackling the issue of chargebacks agents face when a supplier fails or collapses, with a new submission to the Reserve Bank of Australia.
The submission, sent yesterday, was in response to the Bank’s recent paper called the ‘Review of Card Payment System Regulation’.
AFTA welcomed the review by the RBA, which is the first review in nearly 20 years to look at electronic payment process and the payment preference of Australian consumers.
The group said in its response it provided a comprehensive analysis of the many issues raised by the RBA in relation to the way credit card and electronic payments are made within the travel industry.
Specifically, AFTA addressed areas, which could have a sizeable impact on a travel agent’s ability to recoup the cost of merchant facilities and outlines the challenges that travel agents face against chargebacks as a result of the collapse or failure of suppliers.
“Travel agents have a high risk of chargeback due to end supplier insolvency and therefore increased costs in providing credit facilities to customers.”
Jayson Westbury, AFTA Chief Executive
“Despite this AFTA has found that the travel agent community still offers low and very competitive surcharge rates when compared to other businesses in the travel and tourism industry.
“AFTA has a strong track record of prosecuting the case for the agency community and the latest submission does exactly that. Any suggestion that surcharging is removed is completely unacceptable to the industry and further, any suggestion that complicates the transactions via credit cards is also rejected.”
According to the travel agent representative group, Australian travel agencies are now conducting 89 percent of their transaction via electronic payment systems.
It is estimated that Australian travel agents have a minimum of AU$5.4 billion in chargeback risk at any given time, increasing the risk profile of agents when seeking merchant facilities with banks and card providers.
AFTA said it is committed to working with the RBA and other government departments to address the issues detailed in the submission for the betterment of the travel agent community.
