Rumour: Scoot planning to reintroduce payment processing fees

Back in September 2019, Scoot announced that it would remove all payment processing fees globally, in the interest of “making travel attainable for all”. This charge, which could cost up to S$20 per passenger on a round-trip ticket, really had very little to do with the actual cost of payment processing, and I’m sure everyone was happy to see it gone.

But unfortunately, it looks like Scoot may be having a change of heart.

Over the past few months I’ve been hearing from reliable sources that the airline is planning to restore payment processing fees in the near future, first for credit and debit cards, followed later by PayPal and Apple/Google Pay.

Scoot planning to reintroduce payment processing fees?

Back in March 2018, Scoot began removing payment processing fees in selected markets, starting with Europe and then progressing to Asia for selected local payment methods including AXS in Singapore and Konbini in Japan. 

The low cost carrier eventually announced in September 2019 that all payment processing fees would be removed worldwide, citing “customer feedback” and “advances in payment technology”.

“When Scoot first started, we offered a limited range of payment methods at a higher implementation and maintenance cost.

As we expanded globally and heard our customers’ feedback, we took advantage of advances in payment technology to implement many more payment methods to improve our customers’ experience.

In order to pass on the savings to our customers as our costs came down, we have since March 2018 progressively removed payment processing fees in selected markets. Now, we are ready to do away with it globally. We hope this gives our customers better value and more reasons to escape the ordinary with us.”

-Scoot CEO

Today, passengers departing from Singapore can now pay with any of the following methods and incur no extra fees.

However, the failure of competitors to follow suit means that Scoot has been mulling the restoration of payment processing fees for some time now. I understand that a decision has already been made in favour of reintroduction, though implementation has been delayed several times for various reasons.

But behind the scenes, changes are already being done on the backend to prepare for this. For instance, the fare summary page now displays an additional line: “Price does not include processing fee”.

Similar updates are being planned to the rest of the website, but have yet to go live. 

I asked Scoot whether they could comment on future plans to bring back payment processing fees, and received this response.

Scoot regularly reviews our fees and charges to ensure relevance. We are unable to comment on future plans due to commercial sensitivity.

-Scoot spokesperson

What could the processing fee look like?

If Scoot does go ahead with the reintroduction of payment processing fees, I would expect them to be the same S$10 per passenger per segment we saw prior to removal, on par with both Air Asia and Jetstar.

This fee should be applicable to all debit and credit card payments, including via Apple/Google Pay and PayPal. PayNow will likely remain a fee-free option, given  the minimal processing costs. In any case, Scoot is already trying to nudge passengers towards this option by labelling it a “popular choice” (lol). 

Whatever the fee ultimately is, it will have very little to do with the actual cost of payment processing (if so it’d be charged as a percentage of the transaction rather than a flat fee, let alone a flat fee per segment). It’s no secret that such fees are basically money grabs for LCCs, allowing them to market fares that just about cover the mandatory government taxes and airport charges, then make money from the payment processing fee and other add-ons like luggage and meals.

It’s also not clear at the moment whether the KrisFlyer UOB Credit Card will bring back its convenience fee waiver for Scoot tickets. Back when the card first launched in 2019, one of the selling points was a S$10 convenience fee waiver (more like a subsidy really, since the fee for using credit cards was S$20), a benefit which was sunset when Scoot removed payment processing fees. 

I wouldn’t hold my breath though.

Conclusion

Four years after removing payment processing fees worldwide, Scoot may now be preparing to bring them back.

We should have more clarity on this soon, including additional details such as the quantum and implementation date. While it’s not impossible that the LCC makes a U-turn, from what I’m hearing it’s more likely than not that it’ll go ahead.

Stay tuned.