Scoot dumps credit card processing fees: Which airline is next?
Paying by credit card shouldn't automatically attract a surcharge.
Some welcome news for bargain travellers: discount airline Scoot is dumping credit card processing fees for all bookings made directly via its site.
The policy is a global change, but the payment methods you can use will depend on where you're located. In Australia, you can pay for Scoot tickets using Visa, Mastercard or American Express credit cards as well as PayPal, POLi, Apple Pay and Google Pay.
None of these methods now attract a surcharge from Scoot. Note that you might still get hit with currency conversion fees (if your card charges them, not all do). You could also end up paying payment processing fees if you book through a travel agent or third-party site that charges them.
Credit card processing fees have long been a pain point for economy-minded travellers. Under Australian law, companies can't charge more than the actual cost of processing credit card payments. In other words, they can't sneakily use fees as a way to boost the profits on bargain airfares. However, prior to 2016, that rule wasn't fully enforced.
In that year, the Australian Competition and Consumer Commission (ACCC) announced a crackdown on excessive airline payment processing charges for credit cards. That led to all airlines cutting their charges. The reductions were quite dramatic: on a $250 return domestic flight, for example, Tigerair's Visa processing fees dropped from $17 to $3.33.
While Scoot's move is a welcome change, I don't expect we'll see every bargain airline emulating this approach. Margins are very tight in the low-cost carrier business, which is notorious for charging for everything possible to help offset the often-low price of tickets.
It's possible that Scoot's regional rivals (AirAsia and Jetstar, for instance) might trim their costs to stay competitive. But I can't imagine it happening in the Australian domestic market right now.
It's also true that Scoot won't be at the top of most frequent flyer lists (despite its loose partnership with parent airline Singapore). However, it's an option to consider for cheap "placement" flights that connect you to a rewards seat, especially given how hard it is to get seats out of Australia.
Angus Kidman's Findings column looks at new developments and research that help you save money, make wise decisions and enjoy your life more. It appears regularly on Finder.
- UPDATED: What to know about the Tasmanian border reopening
- Virgin Australia’s sale is flying you across the country from $69
- 7 things I learned from having to cancel my domestic trip | A couple of travel makers
- What Virgin’s CEO switch means for the future
- Which airline stocks are beating the rest in 2020?