Payment Processing for Airlines

Airlines are increasingly offering alternative payment to avoid the high cost of accepting credit card transactions. For international payments, local bank transfers allow merchants receive money directly from consumers’ banking accounts. In addition to reduced fees, this international payment mechanism has no risk of chargebacks as is the case with credit card transactions.

Consumers that do pay by credit cards are being assessed additional fees by some international airlines to cover the cost of payment processing. For example, Qantas charges credit card holders $7.70 per passenger for domestic flights and $25 for overseas Jetstar charges $3 per sector per passenger for domestic flights and $5 per sector per passenger for international flights. Virgin Blue charges $3.50 per passenger per flight for domestic trips, and $6 per passenger per flight for international trips.

The airlines believe the surcharges for paying by credit card are justified. Airlines pay high rates for processing cards, particularly since airlines are considered high risk merchant accounts. And, credit card payments have inherent risks for fraud and chargebacks which add expenses above and beyond payment processing fees.