IT’S only a matter of time until airlines in the South African market start to pass on credit card merchant fees to agents and their clients.
A report released by BCD Travel recently outlines how airlines are either imposing surcharges on tickets bought with credit cards or blocking travel agencies from using airline merchant accounts.
“This phenomenon will find its way into the SA market, albeit a little later than it does in Europe and America,” says md of BidTravel, Allan Lunz.
Allan believes credit card purchases are here to stay. “They offer convenience of use, ease of administration and have far less credit risk for airlines than any other means of payment. It is a seamless way of doing business.”
BCD Travel md, Kananelo Makhetha, agrees: “Credit card payment is an industry standard. Customers have streamlined their invoicing process. Beside this, bigger customers are receiving rebates from the card issuers; travellers are covered by insurance and have access to customer support if something goes wrong.”
TMCs also benefit through improved cash flow, lower administrative fees, a single settlement method for all suppliers, reduced fiscal liability and reduced credit risk.
Meanwhile, airlines reap clear benefits from credit card sales, including online sales, income from co-branded cards, quick payments, avoidance of invoice processing and insurance against payment default.
But airlines will be the only winners if this merchant fee model changes.
For more on this story refer to TNW October 27.
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