Budget flight operator Ryanair is again causing controversy as it prepares to launch a new pre-paid Mastercard, the Ryanair Cash Passport, in the UK. The card will be rolled out across Europe over the course of 2011.
At present, Ryanair charges a card processing fee of up to £6 per person per flight when a customer books online. This means a family of four would pay almost £45 on top of the cost of their flights, purely in debit or credit card processing fees.
Up until now, customers could use a pre-paid Mastercard from any provider to avoid the fee.
Popular pre-paid cards include the Caxton and FairFX travel money cards. The airline says that as many as 25% of their customers now use pre-paid cards to avoid booking fees.
However, Ryanair is now withdrawing this concession and will be charging the processing fee on all card transactions, including the pre-paid cards customers have been using until now, from 1st November, 2011. The only exception to this new pricing policy will be their own pre-paid Mastercard which will be free to use at the point of sale. There is a £6 fee for purchasing the Ryanair Cash Passport card which is refunded back to the customer in the form of a Ryanair credit voucher.
Consumer organisations are disappointed that Ryanair are seemingly flouting the advice of the OFT on credit card surcharging in the travel industry, and critics of the new pre-paid currency card point out that usage charges of 50p per transaction will be charged for all non-Ryanair transactions from March 2012 onwards. There are several other fees for its use which are not mentioned in the press statement: these include a flat £4 fee for withdrawing cash over the counter, a £2 cash machine withdrawal fee for every withdrawal and a ‘rolling’ fee of £2.50 if the card is not used for six months.
Ryanair is currently in the process of increasing its prices and reported a 50% increase on profits this year compared to 2011.