Will airlines charge more for using Credit Cards?
Now that merchants are free to impose a surcharge on customers paying by credit card, I wonder how many more airlines will charge for paying by CC?
A few years ago I was in London and I came across an article in magazine that said British Airways charged a £4.50 ($7.11) flat fee for using a credit card when booking for a ticket. Also, Eurostar (the high-speed railway service connecting London with Paris and Brussels) added a £4 flat fee. I even took a screenshot of the article to remind me to revisit my investment in Visa. Here it goes, I thought, another investment that will bite the dust as I reasoned people will use less and less credit cards knowing they will have to pay more.
However, as procrastination is my middle name and I still have not been cured by the buy and hold virus (read somewhere that only billionaires like Gates and Buffett can now afford to wait 20-30 years for their investments to make money) I did not do anything.
And the stock has doubled in value since I bought it!?! It is the only stock of a big company that I own that has doubled ( a short post about it on my ‘investing’ – let’s call it like that – blog V is from Victory and from Visa, V is the ticker symbol for Visa).
Now the question is: Will airlines add now a Credit Card surcharge? They could and they might go away with.
Also, somehow related to the CC charges is a company Dwolla*, a United States-only e-commerce company that provides an online payment system and mobile payments network. I read about it some time ago and then nothing. It does not seem to have taken off even if the offering is very compelling.
Cost to send money: $0.00
Cost to request money: $0.00
Cost to receive $10 or less: $0.00
Cost to receive more than $10: $0.25 (or invite friends and earn transaction fee credits)
*Every year, community businesses fork over around $50 billion to accept credit and debit cards. That’s changing with Dwolla. Built on tried and true industry standards and cutting-edge technologies, Dwolla is the nation’s lowest-cost payment network for merchants. By paying with Dwolla, you can help local business owners actually double their net profit margins.
Taken from NBC news;
“Credit card surcharges are banned by law in 10 states: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas.
Visa and MasterCard have rules that require retailers to handle credit cards the same way in all of their stores across the country. That means a chain with stores in any of the 10 states where a surcharge is banned would not be able to have a surcharge at any of its stores.”
http://m.nbcnews.com/business/attention-shoppers-another-credit-card-fee-here-1C8086499
In the US you cant charge that fee if you have business presence in California, Florida, New York and a few states as well. That takes care of any US based airline.
If they could, I think they would. But as others have said, the fact that they are outlawed in a number states means they can’t….yet.
Although airlines are notorious for adding more ancillary fees, I cannot imagine them directly instituting a credit card fee of 2% or so. The use of credit cards is so prevalent that unlike priority boarding or even extra baggage, the charge would effectively be obligatory. The outrage would be immediate.
As the above posts stated, regulations would prevent this consumer-unfriendly change from even passing.