Treasury yet to respond to Abta warning over fee ban

Agents have been using a variety of tactics to mitigate the effects of the Payment Services Directive 2 (PSD2) – that bars companies from charging consumers for using credit and debit cards – since it came into effect on January 13. The industry has warned that the loss of the 1% or 2% fee can have a significant impact on the low margins typically earned in travel.

“This is such an important issue; we have written to the Treasury highlighting the problems it is causing the industry. We are still awaiting an answer,” said an Abta spokesperson.

Many agents are encouraging payment via bank transfer. Richard Dixon, director of Holidaysplease, said: “We are seeing a definite increase in this payment form.” Holidaysplease also plans to introduce online and app payment systems “maybe in the next 12 months”.

Dixon added that measures taken in the autumn had helped offset the effects of PSD2. “We increased our ancillary sales revenue for January by 115%.

“At the back half of last year, we invested in training and got it into the team’s mind that they needed to replace the revenue we were going to lose. I certainly feel we will have redressed the majority of what we would have lost.”

Many travel agencies are expected to count the cost in early summer when clients pay full balances.

Alan Haynes, owner of Hertfordshire agency Ultimate Destinations, said he faced a £12,000 hit. “The biggest issue is not the percentage of the sales, but the percentage of the profits. This will be difficult to absorb.

“A 0.5-1% commission increase by tour operators is not the answer; all it is doing is pushing up the cost of holidays. The government has got it totally wrong, but the banks tie its hands.”

Haynes called for the government to outlaw cards that offer benefits such as Avios points “on the grounds that they are an incentive to acquire credit”.