Now is the time to start to plan for the change and to consider how it will be possible for the comply...’ business to
There is no question that the transitional arrangements which the federal government has introduced for credit card surcharging are having an impact on the travel industry. The new transparency arrangements that came into effect from the 1st September 2016 for large businesses have seen a change to the credit surcharge rates that are being applied. Importantly, these new rules do not only apply to the travel industry, they apply across the entire economy. However, the majority of travel agencies in Australia do not fall into the large business category and as such have not been forced to make the necessary changes as yet. In fact, in many cases these travel agencies would not yet have all the information they need to be able to comply with these changes. So the problem is how we ensure consumers have the right information to avoid potentially awkward questions at the point of sale when the credit card surcharge rate is being applied. AFTA has produced considerable information packs and awareness guides which can all be found at www.afta.com.au/afta/afta-at-work/electronic-payments.
In addition, we continue to do as much as we can to ensure that everyone in the industry has the necessary information available to them to ensure that they know what they should be doing and by when. This is a complex issue and one that is very important to the travel industry as credit card surcharges are an important component to the sales transactions and revenue mix. If your business is not deemed to be a large one, you have until the 1st September 2017 to comply with the new rules. But regardless of this, now is the time to start to plan for the change and to consider how it will be possible for the business to comply with the new rules. In simple terms the new rules state that the business must only charge the consumer what it “costs” to accept the particular type of credit card being used. This means the rate that the bank is charging the business plus those costs which are deemed to be “allowable”. Allowable elements include; the merchant fee, terminal rental and servicing costs, gateway services, fraud prevention and the cost of third party charge backs which is known as forward delivery risk (FDR). FDR has been a big deal for the travel industry as far back as the collapse of Ansett and AFTA remains committed to exploring workable solutions to this challenge over the year ahead. As I have said, this is a complex issue and these new regulations for credit card surcharging are worth getting your head around very soon as mistakes could be very costly to your business.