[FDOS_UK]

TCSH11

May I give you some advice?

You are posting on a site named Business Traveller and whilst not everyone on here travels for business, many people do and they tend to have a grasp of the basics of business finance.

Cost = the monetary value that a company has spent in order to produce something

Revenue = income, either earned or unearned

When you post “so it is possible to issue tickets with out a cost”, you are stating that the company has spent nothing to achieve this, which is clearly not the case, no matter how small the amount.

To blame another poster for failing to understand that you meant ‘so it is possible to issue tickets with out a cost to the customer‘ is naive and silly and then to develop a persecution complex from this is ridiculous, as is your choice of intemperate language.

I couldn’t care less whether you decide to stay or go, but if you stay, you might wish to think about the above and realise that my response to your post was not an attempt to ridicule you, but to simply set the record straight on a matter of fact.

[canucklad]

And back on topic……
Maybe we’re looking at this the wrong way round.BA state that they’re levying this charge to recoup the cost of managing credit card transactions.

It seems to me, that in our competitive capitalist system, BA shouldn’t blanket charge a levy at 1%, but vary the levy dependent on the credit card company used by the passenger.

After all,surely some credit card companies must charge less than others, otherwise they have agreed amongst themselves a fixed rate,which at least here in the UK is not allowed.

This will allow you and me to choose the best credit card company that doesn’t punish me for using the card.

[MartynSinclair]

I am curious to know why any firm, where nearly 100% of transactions (if not all non-corporate transactions) are by “card” the special levy is not built into the ticket price in the first place. As FDOS Cleary states, its all part of the cost of the product…

[lesmclaren]

Martyn – how right you are!! of course its built into the cost of doing business and always has been, this is why it is so frustrating when additional charges like this are levied and appear to be no more than the company [lets remember that this is far from just being BA] seeking additional ways to find revenue.
The “fair” way to do this is as some companies [e.g KLM] have done which is to offer a range of charges from zero up depending on what method is used, direct bank payment and usually debit card are zero and the credit card charge is related to the true cost i.e. Visa / MC may be lower than AMEX / Diners as an example.
On that point I had understood that UK legislation now required any charges to be directly related to the true cost?.

To refer to a previous post by Mr.Michael where he stated that he had information that a supermarket chain would “soon” introduce credit card charges, I have to say I would be very surprised if that happened as I saw an article recently that said the actual true cost of handling the cash business was above that of any credit card transaction costs – but thereby hangs another tale and topic! Just for the record, if this happened I would immediately take my business elsewhere!!

[MrMichael]

The cost of taking ones customers money does have to be factored in to how one does business. In the business I work people have a number of options in how to pay, but they are small amounts generally under e10. The options are cash (mainly coin) debit type card and credit card. The cheapest for us is debit card where we are charged a fixed fee of just 1.5cents. Next is coin where we estimate it costs us about 2.8c in the euro. This is for collecting it, sorting it and banking it. Credit cards it does depend on the card, MasterCard & visa are both around the same at about 3.5% of the transaction. Amex on the other hand would be around 4-8% of the transaction, subsequently we do not accept Amex, and that explains why a lot of businesses do not. Amex is probably the one with the biggest differences ( not all businesses pay the same) as it requires negotiation with Amex and one can get a better deal dependant on volume.

So if a business is reliant on high volumes and low margins then the attractiveness of the above is vastly different. The big Supermarkets as an example work on low margins on many items, so by accepting Amex any profit is gone through handling the payment. As has been said, it may be that in the future different cards will attract differing surcharges ( as is the case now between debit/credit cards). Amex over the past few years have been agresively marketing their product and thus more and more people are using them, and that profit for Amex is coming from the businesses that accept them.

Any of the big Supermarkets will be brave to be the first to put a charge on credit card transactions, but the one that does first put a toe in the water has to be sure the others will follow, and quickly. If everybody paid in Tesco by Amex they would be virtually wiped out. But if they don’t take it, many people won’t shop there at all as they avidly collect their points and miles. Local & national UK government organisations are starting to introduce a 3% credit card fee for non statutory fees and charges so I think it will become the norm, not the exception.

[FDOS_UK]

[quote quote=775374]I am curious to know why any firm, where nearly 100% of transactions (if not all non-corporate transactions) are by “card” the special levy is not built into the ticket price in the first place. As FDOS Cleary states, its all part of the cost of the product…

[/quote]

Martyn, I guess it reflects desire to show the cheapest ‘headline’ price on search engines.

[lesmclaren]

Mr.Michael. Thank you for the information and of course there is a vast difference between multiple low value transactions and multiple high value ones as in the case of BA.
If I was still in the low value multiple sale high volume [fmcg] business as I once was I would most certainly not accept any credit card sales below a minimum transaction value as indeed is the case with many companies.
Its interesting that so many companies berate the charges of AMEX and yet their own offered credit card is so often AMEX! again BA being an example.

[Defcon5]

Interesting development at a couple of other carriers:

http://home.bt.com/lifestyle/money/mortgages-bills/monarch-and-virgin-atlantic-scrap-credit-card-booking-fees-11364120785233

Flown both airlines this year, enjoyed both experiences. They seem to be airlines which are more customer focussed as opposed to shareholder focussed.

[AMcWhirter]

Defcon5 – It’s good news re Virgin Atlantic. But one wonders whether it will last seeing as BA is gaining a maximum of £20 per credit card booking.

As for Monarch it must be noted that it no longer offers ATOL protection to passengers.

http://www.independent.co.uk/travel/news-and-advice/monarch-drops-atol-cover-from-flight-bookings-financial-protection-a7460186.html

[MartynSinclair]

Interested to hear if ANYONE on here pays cash (any currency) for airline tickets, directly with a main carrier….

[Defcon5]

I think it’s good they’re not copying BA and feel confident that this is something they can cope with whilst benefiting the customer.

It will be interesting to see if it lasts but good on them for transparent pricing.

[Stanley1]

Just had a quick look at a domestic journey with a fare under £100 and the credit card fee is still £5 not 1% – BA IT department strikes again.

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