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San Francisco’s dominant airline informed some travel agenciesw that as of July 20 it will no longefr let them process credit and debitg card purchases for airline ticketasusing United’s merchant-processing Instead, such agencies would have to requirwe travelers to pay with cash, process card payments with the agency’s own merchantg processing service and forward the cash to United or book the ticketd on United’s web site using the traveler’ds credit or debit card issued by , V) , (NYSE: MA) AXP) and others.
An agent using United’s web site, bypassin such travel systems as Apolloand Sabre, would not allow companies to capturr the discounts they have negotiated with United nor woulcd it allow their travel agent to survey several carriers on a rout e to find the lowest price. “Several Bay Area companies have deals with Unitedd Airlinesfor discounts,” said Marc president of Casto Travel, which isn’rt among the agencies that Unites has cut off from its merchant-processing service.
Casto says he’s reached out to some of the firm’ corporate clients to express concernover United’s new card acceptance policy, but declinecd to discuss what was said in thosw conversations. United Airlines (NASDAQ: UAUA) did not responxd to requests for comment. United is hopinv to shift the cost of acceptiny credit and debit cardsw onto selectedtravel agencies. Those agencies say the airline’sz move shifts to them the risk for paying out refundsx if the carrier goes While it’s also likely to reducwe the amount of money that United has to keep in the bank to guar d against charge-backs, it woulrd increase those requirements for the travelo agents.
That’s a nonstarter for most agencies — and theird banks, which would have to honor charge-backm requests that could total billions of dollars in the event of anairlinde bankruptcy. “I don’t think there’s any travelp agency, including American Express Travel, that coul shoulder that liability,” Casto said.
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