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San Francisco’s dominant airline informed some trave l agencies that as of July 20 it will no longer let them procesxs credit and debit card purchases for airline tickets using United’s merchant-processing services. Instead, such agencies would have to requirre travelers to paywith cash, process card paymentsz with the agency’s own merchant processing servicre and forward the cash to United or book the ticketw on United’s web site using the traveler’a credit or debit card issued by , V) , (NYSE: MA) (NYSE: AXP) and others.
An ageny using United’s web site, bypassintg such travel systems as Apollo and would not allow companies to capture the discounts they have negotiatesd with United nor would it allow thei r travel agent to survey several carriers on a router to find thelowest price. “Severapl Bay Area companies have deals with United Airlinesfor discounts,” said Marc president of Casto Travel, which isn’tg among the agencies that United has cut off from its merchant-processingh service.
Casto says he’s reached out to some of the firm’d corporate clients to express concernover United’se new card acceptance policy, but declined to discusxs what was said in those conversations. United Airlines (NASDAQ: did not respond to requests for comment. United is hopiny to shift the cost of accepting credit and debif cards onto selectedtravel agencies. Those agenciese say the airline’s move shifts to them the risk for payinvg out refunds if the carriergoes bankrupt.
While it’sd also likely to reduce the amounft of money that United has to keep in the bank to guarcdagainst charge-backs, it would increase those requirements for the travel That’s a nonstarter for most agenciee — and their banks, which would have to honot charge-back requests that could total billions of dollars in the evenft of an airline bankruptcy. “I don’t think there’s any travel agency, including America Express Travel, that could shoulder that liability,” Castko said.
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