Wirraway
11th Jun 2004, 16:17
Sat "Weekend Australian"
Virgin in blue over credit fee
By Steve Creedy
June 12, 2004
VIRGIN Blue, which last year attacked Qantas for penalising customers with a credit card surcharge, will from midnight Monday slug passengers an extra $2 to pay by credit card.
The decision is a reversal for Virgin, which paints itself as a consumer champion and last year vowed not to introduce credit card fees.
Virgin spokesman David Huttner described a Qantas decision to charge a 1 per cent levy on credit card transactions last July as "unfair" following Reserve Bank reforms allowing merchants to pass on the costs of credit card purchases.
"Just because you have the right to take advantage of the consumer doesn't mean you should do it," he said last year.
Yesterday, Mr Huttner claimed public acceptance of credit card fees charged by Qantas and Jetstar had made the decision inevitable.
He said Virgin would have been happy to stay with the old system but could not leave itself at a competitive disadvantage and was simply being realistic by introducing the fee.
"We definitely did take a stance against this and we thought the public would be more concerned about it than they've proven to be," Mr Huttner said. "In light of that development, we couldn't leave ourselves permanently at a disadvantage to our competitors.
"We've always done what it takes to remain competitive and to be competitive but you can't then say that every time we do a transaction ... that we're getting $2 less than Qantas."
The new fees will apply to all internet bookings and follow a $6-per-sector passenger fuel surcharge Virgin introduced last month.
Mr Huttner said Virgin was not planning to follow Jetstar's lead of introducing a direct debit option.
He said passengers could avoid the credit card charge by paying cash at the airport or at travel agents.
The airlines and Telstra, which applies up to 1.69 per cent credit card surcharge, are so far the highest-profile companies to take advantage of the Reserve Bank's reform of credit card interchange fees.
The RBA ruled that the interchange fees between banks were artificially high and were acting as a subsidy for benefits such as frequent-flyer plans.
New rules introduced last year meant merchants could pass on the fees and led to a shakeup in credit card rewards and conditions.
About 1.8 million Commonwealth Bank customers will be affected by the changes this month.
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Virgin in blue over credit fee
By Steve Creedy
June 12, 2004
VIRGIN Blue, which last year attacked Qantas for penalising customers with a credit card surcharge, will from midnight Monday slug passengers an extra $2 to pay by credit card.
The decision is a reversal for Virgin, which paints itself as a consumer champion and last year vowed not to introduce credit card fees.
Virgin spokesman David Huttner described a Qantas decision to charge a 1 per cent levy on credit card transactions last July as "unfair" following Reserve Bank reforms allowing merchants to pass on the costs of credit card purchases.
"Just because you have the right to take advantage of the consumer doesn't mean you should do it," he said last year.
Yesterday, Mr Huttner claimed public acceptance of credit card fees charged by Qantas and Jetstar had made the decision inevitable.
He said Virgin would have been happy to stay with the old system but could not leave itself at a competitive disadvantage and was simply being realistic by introducing the fee.
"We definitely did take a stance against this and we thought the public would be more concerned about it than they've proven to be," Mr Huttner said. "In light of that development, we couldn't leave ourselves permanently at a disadvantage to our competitors.
"We've always done what it takes to remain competitive and to be competitive but you can't then say that every time we do a transaction ... that we're getting $2 less than Qantas."
The new fees will apply to all internet bookings and follow a $6-per-sector passenger fuel surcharge Virgin introduced last month.
Mr Huttner said Virgin was not planning to follow Jetstar's lead of introducing a direct debit option.
He said passengers could avoid the credit card charge by paying cash at the airport or at travel agents.
The airlines and Telstra, which applies up to 1.69 per cent credit card surcharge, are so far the highest-profile companies to take advantage of the Reserve Bank's reform of credit card interchange fees.
The RBA ruled that the interchange fees between banks were artificially high and were acting as a subsidy for benefits such as frequent-flyer plans.
New rules introduced last year meant merchants could pass on the fees and led to a shakeup in credit card rewards and conditions.
About 1.8 million Commonwealth Bank customers will be affected by the changes this month.
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