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United's credit card policy could foul corporate travel: report
United Airlines’ new credit card acceptance policy may make “life more difficult for corporate travellers and their travel agents”.
Published: 06 Jul 2009
United Airlines’ new credit card acceptance policy may make “life more difficult for corporate travellers and their travel agents”.
The airline has been in news for its decision to “make some travel agents pay the credit card fees on flights that they book”. The airline told an unspecified number of travel agents that starting July 20, they will no longer be able to access its merchant agreements with credit card companies such as Visa, MasterCard and American Express.
Dayton Business Journal highlighted that an agent using United’s website, bypassing such travel systems as Apollo and Sabre, would not allow companies to capture the discounts they have negotiated with United nor would it allow their travel agent to survey several carriers on a route to find the lowest price. According to the report, United is hoping to shift the cost of accepting credit and debit cards onto selected travel agencies. Those agencies say the airline’s move shifts to them the risk for paying out refunds if the carrier goes bankrupt. While it’s also likely to reduce the amount of money that United has to keep in the bank to guard against charge-backs, it would increase those requirements for the travel agents. That’s a nonstarter for most agencies — and their banks, which would have to honor charge-back requests that could total billions of dollars in the event of an airline bankruptcy.
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