Ryanair launches prepay card as only way for customers to avoid fee

Passengers will have to buy flight with 'Ryanair Cash Passport' or pay �6 surcharge as airline flies in face of OFT findingsPassengers flying with Ryanair will have to use the airline's own Mastercard to avoid paying booking fees from early October.The airline currently charges anyone paying with a debit, credit or Visa Electron card an "admin fee" of �6 per one-way flight that can only be avoided by using a Mastercard prepaid debit card.But the airline has announced it is launching its own prepaid Mastercard, the Ryanair Cash Passport, on 4 October and only passengers using that card will avoid the �6 fee. From 1 November, anyone using another brand of prepaid Mastercard will also be charged the �6.Unlike a standard debit card, a prepaid card has to be loaded with money in advance before being used to pay for things and is estimated to be held by only 5% of the population. In the past, Ryanair passengers had been able to get around the charge by using Visa Electron. However, in January last year the airline introduced a �5-a-leg fee (which has since increased) to Electron users.Responding to the launch of the Ryanair Cash Passport, Martin Lewis, of website MoneySavingExpert.com, said: "This is anti-competitive, it's an insult to loyal passengers who first got Electron cards so they could pay for free, then were forced to switch to prepaid Mastercards and are now being asked to dance again this time by getting Ryanair's own prepaid card."The move by the airline is a bold one. A week ago the Office of Fair Trading launched a formal investigation into "a number of airlines" over their surcharges for using debit and credit cards. This follows findings issued by the watchdog at the end of June, when it proposed that charges for paying by debit card should be banned, and pointed out that a simple amendment to existing payment rervices regulations by the Treasury would achieve this.This followed a super complaint from Which?, lodged with the OFT in March, to try to stamp out the practice. Which? claimed that the actual cost to the retailer for processing card transactions was no more than 20p for debit cards and no more than 2% on credit cards.Last week, Which? released research showing that consumers are still paying an estimated �265,000 a day in debit card surcharges for booking plane tickets, despite the OFT's recommendations."Quite simply, Ryanair must be forced to include the booking fee in its headline price ? this is not a voluntary fee ? it's part of core pricing," said Lewis.A spokesman for Ryanair denied that the launch of the card was a snub to the OFT and said it had "been in the pipeline for some time".He said: "We have suffered from criticism for some time that customers do not know where to get prepaid Mastercards. So we decided that to make it easier for customers they could start getting them from our website."He denied the airline charged debit or credit card fees but instead said Ryanair charged an "admin fee" that went towards the upkeep of the company's websites.The OFT said it could not comment on individual airline's pricing structures but did say that its investigation is looking at "any additional charge that fluctuates depending on how you [an airline customer] choose to make the payment."Consumer affairsDebit cardsCredit cardsBanks and building societiesRyanairAirline industryBudget travelLisa Bachelorguardian.co.uk © 2011 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds

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