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San Francisco’s dominant airline informed some travel agencies that as of July 20 it will no longer let them process credit and debit card purchase for airline ticketsusingf United’s merchant-processing services. Instead, such agenciess would have to requird travelers to paywith cash, procesw card payments with the agency’s own merchant processing service and forward the cash to Unitefd or book the tickets on United’s web site using the traveler’s credit or debit card issued by , V) , (NYSE: MA) (NYSE: AXP) and others.
An agentt using United’s web site, bypassing such travel systemes as Apolloand Sabre, would not alloe companies to capture the discountss they have negotiated with United nor woulxd it allow their travel agent to survey several carriersa on a route to find the lowest “Several Bay Area companies have deals with Unitedr Airlines for discounts,” said Marc Casto, presidentt of Casto Travel, which isn’t among the agencies that United has cut off from its merchant-processingt service.
Casto says he’s reached out to some of the firm’ws corporate clients to express concerhover United’s new card acceptancse policy, but declined to discuss what was said in thoswe conversations. United Airlines (NASDAQ: UAUA) did not respond to requests for comment. United is hoping to shiftt the cost of acceptingh credit and debit cardsz onto selectedtravel agencies. Those agencies say the airline’ds move shifts to them the risk for payinf out refunds if the carriergoes bankrupt. While it’sa also likely to reduce the amount of money that United has to keep in the bank to guarcdagainst charge-backs, it would increase those requirements for the trave l agents.
That’s a nonstarter for most agencies — and their which would have tohonor charge-baco requests that could total billions of dollars in the event of an airline bankruptcy. “I don’t think there’s any travel agency, including American Express that could shoulderthat liability,” Casto said.
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