Air NZ customers paying by card hit with extra costs

Photo / APN

Air New Zealand is adding extra charges to its booking process which will increase costs for every customer who pays for flights by credit, debit or charge card.

The card payment fees, effective from December 15, will see a $2 surcharge added to each one-way domestic flight, $5 added to each short-haul Tasman or Pacific Island flight and $10 to each long-haul flight. The airline, which has posted a notification of the upcoming charges on its website, says it is adding the charges "to recover the costs associated with credit, debit and charge card transactions".

Customers can avoid the fees by setting themselves up to pay through internet banking (known as POLi), by using Air NZ's airpoints dollars and travel cards, or by walking in to pay by cash or eftpos at an Air NZ Holidays store or travel agent.

The airline cited independently-owned BP service stations which began charging between 60 and 90 cents for credit card transactions in January. It also referred to the Alert Taxis website, which notes the company charges an extra 10 per cent on credit card transactions, and the police website which notes there is a 3 per cent "convenience fee" when paying infringement notices online.

Air NZ group general manager for Australasia Bruce Parton said: "The increasing cost of card payment processing has given us little choice but to follow the example of Qantas, Pacific Blue, Jetstar and others, in passing on the costs associated with card transactions.

"Credit card fees are not new, ranging from petrol stations, the city council and this morning I was charged a 10 per cent accounting fee for paying for a taxi by credit card.

"With a number of high profile companies passing on these card payment fees, it should hopefully result in raised consumer awareness of the fees associated with card transactions and the relative cost of different payment methods."

Credit card companies charge retailers a transaction cost. That cost used to be absorbed by retailers but last year, a Commerce Commission into anti-competitive behaviour allowed that fee to be passed on to credit card customers to avoid non-credit card customers from subsidising costs.

On being informed of the surcharge yesterday, Consumer NZ deputy chief executive David Naulls said he expected to receive some complaints about the fee.

But he said if businesses' fees were in proportion to the costs they claimed to be covering, surcharges were "quite legal".

"This fee should be a cost recovery, not an extra form of profit."

Mr Naulls said surcharges on credit card transactions were commonplace in Australia and he expected they would be increasingly more common in New Zealand.

Consumer chief executive Sue Chetwin called Air NZ "sneaky" in August when it automatically began selecting insurance for customers at a cost of $10 per flight, leaving them to de-select it manually.

CARD CHARGE

* Air NZ - $2 for each domestic flight, $5 short-haul, $10 long-haul flight

* Jetstar - $2 per passenger (domestic) and $5 per passenger (international), per segment

* Pacific Blue - $5 per one-way flight