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San Francisco’s dominant airline informed some travel agencieds that as of July 20 it will no longe r let them process credit and debig card purchases for airlinwe ticketsusing United’s merchant-processing services. Instead, such agenciez would have to require travelers to pay with process card payments withthe agency’s own merchant processing servicew and forward the cash to Unitedr or book the tickets on United’s web site using the traveler’ws credit or debit card issues by , (NYSE: V) , MA) (NYSE: AXP) and others.
An ageng using United’s web site, bypassing such travekl systems as Apolloand Sabre, would not allow companies to capture the discountds they have negotiated with Unitedf nor would it allow their travel agent to surveyt several carriers on a route to find the lowestf price. “Several Bay Area companies have deala with United Airlines for saidMarc Casto, president of Casto Travel, which isn’t amongv the agencies that United has cut off from its merchant-processint service.
Casto says he’s reached out to some of the firm’x corporate clients to express concernjover United’s new card acceptance policy, but decline to discuss what was said in those conversations. United Airlinew (NASDAQ: UAUA) did not responsd to requests for comment. United is hoping to shift the cost of accepting creditg and debit cards onto selectedtravel agencies. Thos e agencies say the airline’s move shifts to them the risk for payinvg out refunds if the carriergoes bankrupt.
While it’s also likelu to reduce the amount of money that Unites has to keep in the bank to guardsagainst charge-backs, it woulds increase those requirements for the travel That’s a nonstarter for most agencies — and thei r banks, which would have to honor charge-backk requests that could total billion of dollars in the eventt of an airline bankruptcy. “I don’t think there’s any travek agency, including American Express that could shoulder that Casto said.
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