UK Budget Airline Defies Regulator’s Request to Cut Card Transaction Fees

by Mercator Advisory Group 0

Consumer advocates in the UK have been criticizing airlines for surcharges on card payments. The complaints have led the UK Office of Fair Trading (OFT) to carry out an investigation and issue proposals requiring airlines to drop such surcharges. But recently, UK budget airline Ryanair decided to keep the surcharges on all card transactions except those on its own branded prepaid card the Ryanair Cash Passport.

From 1 November, anyone using any other brand of prepaid MasterCard will also be charged £6.

During its investigation, the OFT discovered Ryanair charged a fee of £6 per journey (not per transaction) for both credit and debit card users. As a consequence, the charge would add £48 to the cost of tickets for a family of four’s outward and return flights.

Ryanair has a history of forcing customers into using a particular pre-paid credit card if they wanted to avoid these fees. Until 2009 a Visa Electron was the budget airline’s favoured pre-paid card, but it changed the rules in January 2010 so that only a prepaid MasterCard would avoid the charges.

Surcharges are generally forbidden by international card networks such as Visa and MasterCard except in certain markets where local regulations allow such practices, such as Australia.

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