All of Ryanair’s tickets are to date paid for by credit card. So Ryanair’s new fee simply passes the cost of the credit card fee (and then some) on to their customers, as Illustrated in the screen shot to the left of a typical Ryanair online ticket purchase. What you can see is that they add GBP 12 onto a GBP 216 air ticket (so in this example it represents a 5.5% levy to the passenger.
What this policy change and example illustrates to so well, is that cost of accepting credit card payments is significant, and in Europe, airlines can simply hike this expense right back to their customers.
Is it fair? I think so. After all it is the customer who is receiving the benefit of convenience by paying with credit card. For the merchant, accepting payment by credit card brings risk of chargeback, as well as the cost of the transaction as levied by the credit card companies.
As an online seller, you need to weight the costs incurred for each online payment method. You will find that most credit card payments are going to cost you at least 2%.
I believe a better option is to give the customer a choice in how he or she wishes to pay. And by choice, what I am saying is that the more payment options you give your customers in how they pay, the better you look compared to the competition. Ryanair are hard nosed bastards, pardon my French, and they have dictated to their so-called “valued” customers that they have no options in how they pay, and all customer will pay the added costs of credit card transactions.
The sad fact is that Ryanair has completely ignored the possibility of allowing their customers of paying with non-contingent bank account sourced funds, which would completely avoid the necessity of levying these added fees.
Yes, there is a way online merchants can accept payments from user’s bank accounts, risk free, and as a merchant, you could even offer you customers a 2% discount if they paid with bank account funds. I know of one such service which reached out to Ryanair offering this possibility, and they were rebuffed by the opinionated airline.
No company is too big to treat their customers in a shoddy manner and get away with it in the long term. The take-away from this post is that you don’t have to run your business like Ryanair. You should offer your online customers numerous ways to pay. And cash from bank account should be one of the offered payment methods.