IATA Targets Credit Card Fees

The International Air transport Association announced new services to help airlines reduce costs and risks associated with credit card operations. Worthy goals, but does anyone really think credit card companies will lower their rates simply because IATA asks? IATA previously has cried out against GDS fees, saying it "cannot accept" $4 per transaction and demanding GDSs cut fees to something closer to 50 cents. How well did that go over?
Regarding credit cards, IATA now says it would help carriers "reduce commission rates and service charges." The IATA CreditCard Optimisation Service also would "improve speed and method of payment and create a single point of contract for all credit card negotiations. The negotiations will be based on complete audit of all credit card contracts of a participating airline and the results will be benchmarked against a proprietary database to identify gaps. New agreements will then be negotiated with banks to bring greater savings.

"Credit card acceptance sees airlines paying high merchant fees," IATA added. "The fees are numerous and vary from country to country. Some are fixed amounts. Some are percentages of the transaction value. Understanding what exactly is being charged is a daunting task. Without a thorough understanding of this complexity, airlines can be exposed to unnecessarily high fees."

The press release announcing the CreditCard Optimisation Service and a fraud reduction service called IATA Perseuss can be found here.