Holiday spending on credit cards is set to increase by 80% according to TravelWeekly, a UK trade rag. As the Payment Service Directives now prohibits cardholder surcharging, Brits will no longer be subject to the standard 2% add-on fee.
Chris Lee, director and head of travel and professional sports at Barclays Corporate Banking, said prior to PSD2, 70% of holidays were paid for by debit card.
However, since January that proportion has changed to beyond 50:50 in favour of credit cards as consumers take advantage of the benefits of paying on credit.
Speaking ahead of next week’s Barclays Travel Forum, Lee said: “No one knows for sure, but we think that will flip around from what it previously was [and] might go to as much as 80:20.”
It is a plus for consumers; though you have to wonder why one of the lowest interchange markets in the world ever permitted surcharging in the first place.
“Many have built it in to their overall pricing for all customers to maintain margins because they can’t discriminate between people who use credit cards and people who pay with debit cards,” he said.
“Some have decided not to adjust their pricing for the time being and have just taken the hit.”
Abta said travel agents are hit particularly hard by the surcharge ban because they do not have the option of raising prices to pass on the costs of processing payments.
Now, those hoping to visit a galaxy far away will realize instant savings.
May the force be with you.
Overview by Brian Riley, Director and Jedi Master, Credit Advisory Service at Mercator Advisory Group