Magic Tours International will absorb credit card fees on all travel advisor bookings from 1 October 2026 – the day the Reserve Bank of Australia’s ban on card surcharging takes effect – across its Europe Holidays, World Holidays and TravelRez brands.
The move is designed to protect consultant margins once surcharging can no longer be passed on to customers, a change the trade has been bracing for since the RBA confirmed the ban earlier this year.
Under the arrangement, consultants booking through the group’s offices, websites or TravelRez FIT platform will send clients a secure payment link. The client pays by credit card, Magic Tours International absorbs the card fee, and the consultant’s full commission and markup – up to $500 per booking – is paid directly to the agency’s nominated bank account.
“Australian agents shouldn’t have to choose between staying compliant and staying profitable,” said Magic Tours International managing director Chip Popescu. “From 1 October, the rules change – and rather than leave our partners to absorb the hit, we’re absorbing it for them. Book with us the way you always have, quote your client the full price including your markup, and keep every dollar of it. We’ll take care of the card fee.
“This is about backing the agents who back us,” Popescu added. “The trade has been asking how they’ll manage these costs, and we wanted to give them a clear, simple answer. Nothing changes on their end – we’ve done the work so they can keep selling with confidence.”
How the deal came together
Popescu told Travel Weekly the initiative grew out of negotiations with the group’s longtime bank, Westpac.
“We negotiated with our bank, and we said, ‘Look, what is the best we could do, given the situation and our industry and how it operates?’,” he said. “They have assisted us. They’ve come to the party and they said, ‘look, we’ll do this for you’. Obviously, we need to reach certain targets, but we’re very confident that we can. And they said we will help you out.”
“We’ve been around for about 35 years, so we’ve built a long-standing relationship with Westpac – always been with them,” Popescu said. “I think that contributed to the fact that we managed to get them on board. It’s not a major thing – obviously they have a very small margin as well in this situation – but they have been able to assist us.”
Popescu said the Surfers Paradise-based group had modelled the cost before committing to it.
“We’ve worked it out based on the last three months and we have found that indeed it is a cost to the business,” he said. “But it is a cost that we as a supplier can absorb by negotiating better deals with our suppliers overseas, and also being able to reduce other costs within our operations.
“Our physical brochure has been discontinued – we have an electronic brochure that cuts down on brochure and distribution costs. So we looked at all the operational costs that we had and we said, to allow this to happen and assist our travel partners, what other costs are we able to reduce that will basically at least mitigate for our new cost? And we’ve been able to do that.
“We’ve been able over time to reduce certain parts of the business by using AI, using other systems, technologies and efficiency assistance platforms, that have allowed us to not only increase our efficiency, but also cut costs along the way.”
$500 cap
Consultants will also be reimbursed for any booking or processing fees they attach to a sale, in addition to their commission and markup.
“Because we know that sometimes consultants also have other fees or costs that they attach to a booking, we will basically allow them to use the full amount that relates to our booking, including any booking fees, processing fees, or whatever other fees they might have for that particular booking, and we will then refund that together with the commission,” Popescu said.
“Obviously, we kept that to a $500 maximum, because that could go on and on if they add on to the booking. But if it’s just a booking fee, processing fee, or whatever they normally charge in the process of a booking, we’re happy to cover that and return it together with the commission.”
Popescu said the model also removes complexity for consultants at the point of sale.
“A lot of [agents] don’t really know how to word this properly, or how to handle the actual legal side, so they don’t get into any strife with the Reserve Bank,” he said. “We’re trying to take all those complexities away. Make sure that they don’t even have to discuss this with a client. They have the full amount, margins, whatever they need to put on. It makes it more streamlined.
“There’s one price to pay, and that includes all the fees, all the commissions, everything that’s included. It stays with one single operator, which might make it easier for the agent as well because we do cover so many different products, from flights to transfers to individual hotels to tours, cruises and other products. So it can stay in one booking with one payment – the client pays through the Westpac link and off they go.”
Popescu was clear the arrangement is not a workaround of the surcharge ban.
“We’ve checked this with our legal representative just to make sure that in terms of the warning and what we do, it is within the guidelines of the RBA,” he said. “They’ve checked it, they’ve come back and said, absolutely, there’s nothing there that could be used in terms of credit card surcharges or any disclosure that needs to be made – because in fact, it isn’t a credit card surcharge. We don’t have that surcharge. We’re charging the exact amount that is being quoted, plus any booking fees, which are not credit card fees anyway. So there’s nothing there to be worried about.”
Asked why Magic Tours International was prepared to wear the cost, Popescu pointed to the group’s dependence on agents.
“It might be an existential situation where, if they continue cutting into their margins and profits, it might be a time where they might have to give up altogether, which for us would mean a disaster, being a wholesaler,” he said. “We really rely on the travel agents continuing what they’re doing best, and if they don’t exist, we don’t exist.”
The offer launched today, with an EDM going out to agents, and Popescu said the group had already been sounding out its most loyal partners on how the changes would affect them.
“We have been discussing with our most loyal agents, and they were basically not really understanding how the system will work for them in the future – not how we absorb this, but how they will be able to deal with the credit card situation going forward,” he said. “I think this takes another level of complexity for a small business. It’s not only that, but it’s a legal issue as well.”
Popescu said he expects other operators to follow with their own solutions.
“It all depends – it comes down to the full picture of the operations,” he said. “I think in the long run, this could be an opportunity for consultants to keep on doing what they’re doing without having to worry too much about the new legislation. It might be only one solution – obviously, there’s going to be several others. But I think from our point of view as a wholesaler, that is probably the solution we can come up with and assist the consultants with.”
The offer applies to flights, accommodation, tours, cruises and packages across Europe Holidays, World Holidays and TravelRez.
ATIA accredited travel advisors seeking more information can use the resources available here.
Trade’s mixed response to Reserve Bank scrapping of credit card surcharges
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