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Ryanair flies under Swedish card fee prohibition

David Landes · 2 Sep 2010, 18:53

Published: 02 Sep 2010 18:53 GMT+02:00

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According to the Swedish Consumer Agency (Konsumentverket), both airlines are exempt from the rules, which came into force on August 1st, because the head offices of both airlines are located outside of Sweden.

“The new legislation is good, but unfortunately we’re forced to observe that certain companies can continue to charge fees for credit card purchases by referencing laws in another country,” consumer ombudsman Agneta Broberg said in a statement.

“For consumers it can be hard to understand when fees can be charged and not.”

The law stipulates that vendors aren’t allowed to charge a fee for certain payment methods, including debit or credit cards.

The law also includes cases when sellers charge a fee for paying with a card, while foregoing any charges for customers who pay with cash or via internet banking. Nor is it allowed to charge consumers for using a certain type of credit card.

Ryanair has called what its customers pay an 'administration charge', which is levied on purchases made with any card other than a MasterCard Prepaid.

The Consumer Agency has already singled out three travel companies, Mr Jet, Tavel Store, and Wizz Air, which it accuses of continuing to charge bank card fees even after the new rules came into effect.

Each company has until September 22nd to respond to the agency’s criticism.

But the head of Mr Jet, Didrik von Seth, complained that the rules are unfair.

Story continues below…

“Companies which don’t have their operations based in Sweden can continue,” he told Svenska Dagbladet (SvD) newspaper.

“The question is how the Consumer Agency is going to react so that those who operate here (in Sweden) aren’t discriminated against and are a competitive disadvantage.”

David Landes (david.landes@thelocal.se)

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Your comments about this article

19:12 September 2, 2010 by Twiceshy
So they can operate in Sweden without following Swedish laws?

Maybe I should not follow Swedish laws because I'm a foreigner then?
20:26 September 2, 2010 by aaww
it's insane that they would charge credit card fee on low fare airline bookings.

whose paying cash to airline tickets these days? so there is a cost anyway, why not build it into the fare?
20:34 September 2, 2010 by Mb 65
They won't have it all their own way now that Easy jet are here and Ba starting soon.
22:16 September 2, 2010 by 4thtankie
great news about easyjet, just a pity their not up and running yet, still, lets face it, they are still cheaper than flights were 15 years ago, and much cheaper than the ferry.
23:49 September 2, 2010 by jayhen
The cost to us as consumers is a lot less. The cost to the planet and to future generations is massive.
23:58 September 2, 2010 by Ruud
You only can pay a ticket with a credit card!

But why they don't allow a payment by iDEAL?

That can be free of charges!
00:58 September 3, 2010 by Prat
Ryanair uses such fees to generate revenues & profits. The low advertised ticket price becomes bait-and-switch.

Of course they could eliminate the fee - technically there are low cost alternatives, but they resist to make more money.
01:07 September 3, 2010 by Homesoul
Sadly Ryanair is the only game in town unless Easyjet gets their act together.
08:55 September 3, 2010 by Keith #5083
#4 4thtankie

Quite correct - but people forget. 15 years ago it cost 3 or 4 times today's cost.

#5 Jayhem

Yep! So the PC you type this on came from...where? Oh yeah, it was freighted here by the biggest of all the polluters, merchant shipping!! And your 'electric hybrid car' with batteries made from ore in Canada, shipped to Asia, then shipped back to Europe. I bought razor blades this week from a leading national Swedish food chain - the blades made in USA, packed in...?Tjeckien? then shipped to Sweden. Airlines are the 'easy target' and maybe if we had not been able to travel around the world we would not fully appreciate how marvellous Sweden really is!

But look on the bright side, airline fares are so cheap now we can all volunteer to pay more taxes to clean up the environment polluted by consumer demand..
09:20 September 3, 2010 by Rick Methven
Debit cards only incur no charge to the seller when they are used domestically. Once the transaction is cross border it goes via Visa or Mastercard and is treated in the same way as a credit card and involves a currency exchange as well. If a company such as Ryanair who operates from Ireland and has all its revenue in Euro's was not to charge a card fee, they would loose out.

Also do not be fooled into believing that other operators do not charge for card usage. They ALL do. The difference is that Ryanair breakdown the charges included in the final price you pay. British airways just adds a much larger amount and calls it Taxes and "other" charges, and does not specify what the "other" charges are
10:10 September 3, 2010 by BrittInSweden
@aaww Low cost airlines are more likely to add credit card charges, they don't have big profit margins on what they do like other airlines so absorbing the VISA and Master Card costs isn't something they are likely to do.

Only thing Ryanair does badly in this instance is that they charge that fee multiple times based on what kind of booking you are doing for one transaction. It should be one fee for one transaction.

I don't fly and would never fly Ryanair but how anyone that does can complain about this is beyond me. You want cheap you have it, the credit card costs is minimal anyway, not like you are paying other airline costs just by adding that fee onto the bill. If you don't like it then fly another airline.
11:04 September 3, 2010 by jayhen
#9 'Keith #5083'

Thanks, you make some good points about different sources of pollution. I wasn't offering any comparison with other forms of pollution/transport, but it's a useful comparison to make.

Let's compare things in terms of the amount of energy it takes to transport stuff, using the UK as an example case study of consumption over a year, per capita. This is not the amount of pollution created, which is quite complicated to calculate, but it is a useful basic comparison of the energy needed for different forms of transportation.

Some rough calculations show that freight transport for all imported goods (across the whole UK population over a year) uses about 4kWh/d/p (kilowatt hours per day per person). Road freight about 7kWh/d/p. Average car use about 40kWh/d/p. It is estimated that the equivalents for an average person living in Sweden are about half these figures.

But a single intercontinental flight of 10000km (or let's say 2 return flights from Stockholm to the South of France, since they're less efficient) uses 30kWh/d/p.

So, if we're dealing with transportation alone, you're of course right to highlight the fact that the average consumer 'sponsors' a lot of transportation by simply consuming stuff. But relatively speaking, according to these approximate figures, the energy cost (and therefore roughly speaking the carbon dioxide and other greenhouse gases) generated by transportation is very high for flying compared to other transportation that we use.

So you're right, flying IS an easy target because relatively it uses a lot of energy, which means that every single decision not to fly has a considerable impact on a individuals's energy use, and therefore on greenhouse gas emissions. Taking the train, for example, uses less than 1/5th of the energy.

My point was that, in considering the 'cost' of flying, we should not forget that the hidden cost of pollution is massive. Whether you compare it to other forms of transport or not.

(Most of the numbers are taken from http://www.withouthotair.com/)
11:20 September 3, 2010 by rba
Those are not credit card fees, and if you believe they are I have a bridge to sell you.

If they WERE credit card fees, they wouldn't be charged for each passenger and each flight. Do you really believe Ryanair pays 4 credit card fees to the bank when you book a 2 passenger return flight?

It's just a way of making the prices seem lower than they are, as these fees only pop up at the end of the booking process.
13:34 September 3, 2010 by Renfeh Hguh
Ryanair sell their tickets online from out of Dublin and it is correct that they do not have to abide by this Swedish law. As for the charge per person that makes sense as they probably pay a merchant service charge that is a % of the purchase amount. So if you book for flights at 4 times the cost of 1 flight then it will cost them 4 times as much.

Every airline, shop or porn site you make purchases with any card factors in the card costs into their pricing. At least Ryanair is up front about the charges, of course they are doing that so they can advertise the smallest possible starting price for their fares.

Sadly the real loser as a result of this Swedish law is the consumer. To cover the costs they incure for more expensive cards, merchants will raise the price.

@Rick, merchants do have to pay a service charge even if it is a domestic debit card cleared locally and this charge may even be levied if the merchant acquirer and the card issuer are the same bank.
13:42 September 3, 2010 by rba
> As for the charge per person that makes sense as they probably pay a merchant service charge that is a % of the purchase amount. So if you book for flights at 4 times the cost of 1 flight then it will cost them 4 times as much.

What kind of twisted logic/maths are those? If the charge is a percentage of the purchase amount, then the increase is already covered when the purchase amount is bigger.

If a single flight costs 1000 sek, 1% is 10 sek. 1% of 4000 sek is already 4 times bigger than 10 sek.

14:21 September 3, 2010 by IWP
Well, what a surprise! In a country with no adequate consumer protection in place - where business ethics are unknown, and those toothless warriors, the ombudsmen sit on their ases awaiting their pensions - what else would you expect?

Konsumverket is a joke. A useless bunch of self-serving donuts!
14:51 September 3, 2010 by flintis
# It's either put up with it or fly with the "Gay" airline #
16:05 September 3, 2010 by Renfeh Hguh
@rba, Are you seriously that stupid? Or do you just like to mouth of even when you have no clue about the discussion?

Ryanair charge at a fixed rate of £5 per passenger per one way flight. This does not vary whether you buy a ticket for £1 plus extras or if you pay £200 + On the other hand Ryanair will most likely be paying their bank either a % or a mixture of fixed and % fee. If the purchase price is low, RA make a nice profit and if the price is high then may even make a loss, but given their low price structure, the losses will be well and truely offset buy the profits on the low fares.

If they did not charge fixed a per flight fee then the only other economical model they could use would be to charge a percentage, but this makes it difficult to spell out the fees in advance. They are trying to make it easy for stupid people like yourself to count with your fingers what the ticket price will be in advance.
18:39 September 3, 2010 by Twiceshy
> If they did not charge fixed a per flight fee then the only other economical model they could use would be to charge a percentage, but this makes it difficult to spell out the fees in advance.

Except that they don't spell out the credit card fees in advance, they do it at the end of the booking (last time I checked).

As long as we're in the fictional world where credit card fees are proportional to the number of flights instead of fixed or proportional to the transaction amount, I guess we can also add the fictional assumption that the fees are shown in advance?
19:26 September 3, 2010 by steve_38
What are people complaining about, the flight costs with Ryanair are dirt cheap so what about a few sek to pay by credit card. Have you looked at SAS from Goth to Lon its at least 5 times the price.

You either love or hate them but no one flies anywhere cheaper its a fact.

Stop complaining about it and get a life.

Simple fact about flying with Ryan air, check prices daily as they change all the time, and make sure you read the web site. If you have half a brain its incredibly cheap and easy.

I would fly with Ryan air just to hear Michale O Leary quotes as he is one of the funniest CEO's around.

20:16 September 3, 2010 by 4thtankie
maybe ryanair could start doing budget mile hile gay weddings like SAS.....
11:04 September 4, 2010 by Renfeh Hguh
@Twiceshy if you don't open your eyes then you will never see them


What is so hard for you to comprehend?

I can't believe how up tight people are getting about this? Every company that accepts credit card payments have built the cost into the prices!

Ryanair is just stripping all possible fees, taxes and other costs from the base flight price so that it can advertise things like €1, £1 or 1kr to draw in the tight arsed stupid people who really believe you can fly for €1, £1 or 1kr
14:19 September 4, 2010 by Garry Jones
I can't beleieve those of you that are not supporting Ryan Air

In 1981 I made my first trip from the UK to Sweden. The return flight quoted was £369, a mere fortune way back then and out of my league as a 20 year old even though I was seen as a high-earner in the fledging computer industry. I went by train with Transalpino and the return cost of £79 from London to Stockholm via Harwich-Hook of Holland, Hamburg, Puttgarden-Rødby, Copenhagen, Helsingør-Helsingborg. I suppose you can call the food I consumed on the 36 hour journey and all the loose unwanted change I ended up with (Dutch florins, German marks and Danish crowns) for "Hidden extras".

I just checked Ryan Airs website. A return, Stockholm-London 5th-14th October 2010 costs 110kr. If I check in a 15 kg bag add 220kr. If I use my Visacard add 110kr. Thats 440kr total return with no hidden charges. If I decide not to check in a bag (I can often make do with a 10kg cabin-bag because I stay with my mother in London), and if I pay by Access "prepaid" card then there I actually pay a total cost of 110kr to fly return London-Stockholm. What on earth are people going on about?

Arguing that Ryan Airs website is accessed in Sweden so Swedish law should apply is daft. Do you think websites can actually cater for 202 different countries laws? The glory of the internet is that it is borderless. However every website has to be hosted and each country can deal with what they see to be as serious problems on a national basis. For instance its impossible to access Pirate Bay in Italy.

Leave Ryan Air alone to be able to offer their amazingly cheap prices so we can book return flights for 110kr, even it means we are charged 110kr to use a visa card. What's the problem?
17:34 September 6, 2010 by UnderwaterWeaver
@IWP Well Seen and Well held !

Your uncanny insight is really refreshing.

Please don't let life's labours through this bureaucracy dull such a keen eye.
05:04 September 9, 2010 by scandinavian leather

Assuming you live at Skavsta and your mother lives at Stansted I would agree with you. I would further be inclined to agree with you if your time was worth nothing.

However, assuming that is not the case your 440 sek goes up exponentially after you add the costs of getting to Skavsta and into downtown London and vice versa.

Give me SAS any day.
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