The Charge Is Not Enough: Ryanair to Introduce New Credit Card Fees
Probably to make up for the incredible cost of running a transaction server, Ryanair has announced it will introduce an additional 2% credit card fee to every payment made on its website. And by “additional” I mean that it won’t replace the already existing 6€ fee on every payment ; no, the 2% will come as an extra bonus.
The subtle beauty of modern ancillary revenue is that they’re not so much a financial trick as a wonderful marketing idea. You take whatever you want to charge, advertise an artificially (insanely?) low price and move 95% of what you’re charging to pseudo-options that will be impossible to avoid for the vast majority of consumers.
Ryanair of course, is no stranger to the trick. In fact, it has become so good at it that it almost seems to be mocking those that try to force it into behaving more fairly. After the Office of Fair Trading finally found a way to slam Ryanair’s abusive debit debit card fees, the airline complied, eliminating the fee… Only to replace it with an-accross the board 6€ administrative fee. Allegedly to cover the costs associated with Ryanair’s website (which would mean Ryanair spends 1/2 as much as Facebook does to serve 1/15th as many users, a disquieting perspective…).
That’s in addition to the 2€ “EU 261 levy” to comply with customer service laws, the 0,25€ “ETS levy” to comply with environmental laws, and now the 2% credit card fee. A very slight move as the charge does not concern the debit card(protected by the OFT’s ruling). The move to a percentage based charge is rather new for Ryanair, but I’m betting it’s not the last we see of it. After all, the charge is added at the very last step of the payment, when every other fees have already been agregated in the final price. Which means that customers are actually paying a charge on the charges they’ve already paid.
On top of it all, Ryanair is accusing the OFT of having an anti-customer policy because it forbids airlines of partnering with banks to incentivize certain debit cards (the mythical Mastercard Prepaid debit card that used to be the only way to avoid debit card charges). Sadly the OFT has chosen to answer, vehementely denying something that hardly anyone could believe and thus giving the airline some more media coverage.