Ryanair defends its new prepaid credit card

17 October 2011 15:15:39

Ryanair has rejected criticism of its Cash Passport prepaid card.

Low-cost carrier Ryanair has defended its controversial Cash Passport prepaid credit card, following its launch in the UK. Consumer group Which? has previously criticised the airline's decision to impose booking fees on all transactions made with cards other than the Cash Passport. However, Ryanair argues that the new product offers consumers a means of avoiding these fees.

Cash Passport prepaid credit card
The Ryanair Cash Passport is a prepaid credit card that the airline is encouraging passengers to use when they book flights. Instead of paying for tickets using a standard credit card, consumers load funds onto the card before making their purchase. By choosing this method of payment, they can avoid the £6 administration fee that the airline will levy on all of its journeys from the beginning of November. The card costs £6 to acquire from Ryanair's website and this fee is then reimbursed in the form of a flight voucher. The airline's outspoken chief executive Michael O'Leary commented: "Ryanair's new Cash Passport card makes other prepaid products far less attractive as only Ryanair Cash Passport holders will be able to avoid Ryanair's £6 admin fee from November 1st."

Controversy surrounding the new card
However, the launch of the new prepaid credit card has been mired in controversy. Ryanair has already rejected suggestions by the Financial Services Compensation Scheme that passengers using the card would lose their money in the event that issuer Access Prepaid, a subsidiary of MasterCard, goes bankrupt. It stated that all money loaded onto the Ryanair Cash Passport is held in trust for cardholders to ensure they are protected. However, criticism has also been levelled at the airline for only choosing to waive its administrative fees when bookings are made with the Cash Passport card.

Prepaid credit cards provider FairFX has suggested that Ryanair is "taking advantage" of its customers with the new product. "They are telling their customers to buy their own card, which they profit from, in order to get around their own fees. It's unbelievable," said Stephen Heath, chief executive of the company. Consumer group Which? also questioned Ryanair's Cash Passport last month, with executive director Richard Lloyd suggesting its introduction, together with the new administrative fees, makes it "even more difficult for customers to avoid a surcharge when they pay for their flights".

The introduction of the prepaid card as the only way to avoid journey surcharges comes at a time when the Office of Fair Trading is proposing that airlines drop these fees on debit and credit card payments. 

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