The removal of processing fees for online card payments is seen in line with Bank Negara Malaysia’s announcement made last year that retailers were not allowed to impose surcharges for payments using debit cards.

KUALA LUMPUR: Low-cost airline AirAsia will remove the processing fee for customers who pay either through online banking and credit card from October.

“I’m pleased to announce that @Airasia is removing processing fee from October. 

“We still still have some charges to drive traffic to cheaper, safer and less fraudless methods. But there will be methods with no fees,” AirASsia group chief executive officer Tan Sri Tony Fernandes tweeted yesterday.

He tweeted the announcement with two hashtags, namely #technologyrules and #makingairfaresaffordable.

AirAsia’s processing fee starts at RM4 for customers using direct debit and it can go up to RM16 with UnionPay.

However, if a customer opts to make payment using AirAsia's e-wallet application BigPay, there is no processing fee involved.

The removal of processing fees for online card payments is seen in line with Bank Negara Malaysia’s announcement made last year that retailers were not allowed to impose surcharges for payments using debit cards.

A similar prohibition is applied for credit card payments under the rules of international card schemes such as Visa and Mastercard under the Payment Card Reform Framework.

The central bank said one of the reasons retailers imposed a surcharge was to recover the cost incurred by them when accepting card payments whereby they were typically charged a transaction fee, also known as the merchant discount rate (MDR).

In general, Bank Negara said, the MDR for credit card was higher than the MDR for debit card.

Globally, it said, countries had adopted different approaches in dealing with the issue of surcharges imposed by retailers for card payments.

The rationale of such an approach was to send the correct price signal to encourage consumers to pay using the more cost-effective debit card, it said. 

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