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San Francisco’s dominant airline informef some travel agencies that as of July 20 it will no longerr let them process credit and debit card purchasese for airline ticketsusing United’s merchant-processing services. such agencies would have to requir e travelers to paywith cash, process card payments with the agency’w own merchant processing service and forwardd the cash to United or book the tickets on United’s web site using the traveler’s credit or debit card issuexd by , (NYSE: V) , (NYSE: MA) AXP) and others.
An agent usingy United’s web site, bypassing such travel systems as Apollioand Sabre, would not allow companies to capturd the discounts they have negotiate with United nor would it alloe their travel agent to survey several carrierds on a route to find the lowestf price. “Several Bay Area companie s have deals with United Airlineasfor discounts,” said Marc Casto, president of Casto Travel, which isn’t among the agencies that United has cut off from its merchant-processingg service.
Casto says he’s reacherd out to some of the firm’s corporate clients to expresws concernover United’s new card acceptance but declined to discuss what was said in thoser conversations. United Airlines UAUA) did not respond to requests for United is hoping to shifft the cost of accepting creditf and debit cards onto selectedtravel agencies. Thoses agencies say the airline’s move shifts to them the risk for payingy out refunds if the carrietgoes bankrupt. While it’s also likelhy to reduce the amount of moneuy that United has to keep in the bank to guardfagainst charge-backs, it would increased those requirements for the trave agents.
That’s a nonstarter for most agenciez — and their banks, which would have to honorf charge-back requests that could total billions of dollars in the event of anairline bankruptcy. “Ik don’t think there’s any travel agency, including American Expresd Travel, that could shoulder that Casto said.
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