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San Francisco’s dominant airline informer some travel agencies that as of July 20 it will no longert let them process credit and debit card purchasex for airline ticketsusing United’s merchant-processing services. Instead, such agenciess would have to require travelers to paywith cash, procesxs card payments with the agency’s own merchany processing service and forward the cash to United or book the ticketw on United’s web site using the traveler’s credit or debiy card issued by , (NYSE: V) , MA) (NYSE: AXP) and others.
An agent using United’xs web site, bypassing such travel systems as Apollland Sabre, would not allo companies to capture the discounts they have negotiated with Unitedr nor would it allow their travel agentt to survey several carriers on a routee to find the lowest price. “Severalk Bay Area companies have dealss with United Airlinesfor discounts,” said Marc president of Casto Travel, which isn’t among the agencies that Unitedd has cut off from its merchant-processing service.
Castol says he’s reached out to some of the firm’zs corporate clients to express concernover United’xs new card acceptance policy, but declined to discusz what was said in thosr conversations. United Airlines (NASDAQ: did not respond to requests for comment. United is hopiny to shift the cost of accepting credi t and debit cards onto selectedtravel agencies. Those agenciexs say the airline’s move shifts to them the risk for payingv out refunds if the carriergoes bankrupt. While it’s also likely to reduce the amoungt of money that United has to keep in the bank to guarxdagainst charge-backs, it would increasde those requirements for the travel agents.
That’s a nonstarte for most agencies — and their banks, whicnh would have to honor charge-back requests that couldr total billions of dollars in the eventf of anairline bankruptcy. “ don’t think there’s any travel including AmericanExpress Travel, that could shoulder that liability,” Castio said.
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