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San Francisco’s dominant airline informe d some travel agencies that as of July 20 it will no longere let them process credit and debit card purchasex for airline ticketsusing United’d merchant-processing services. Instead, such agencies woulrd have to require travelers to pay with process card payments withthe agency’s own merchan t processing service and forward the cash to United or book the ticketes on United’s web site using the traveler’as credit or debit card issued by , (NYSE: V) , MA) (NYSE: AXP) and others.
An agent using United’z web site, bypassing such travekl systems as Apolloand Sabre, would not allow companies to capturr the discounts they have negotiated with United nor would it alloe their travel agent to survey several carrierx on a route to find the lowesft price. “Several Bay Area companies have deals with United Airlinesfor discounts,” said Marc Casto, president of Casto Travel, whicj isn’t among the agencies that Unitedc has cut off from its merchant-processinvg service.
Casto says he’s reached out to some of the firm’zs corporate clients to expressa concernover United’s new card acceptance but declined to discuss what was said in those conversations. Unitedc Airlines (NASDAQ: UAUA) did not respondf to requests for comment. United is hoping to shift the cost of accepting credit and debit cards onto selected travel Those agencies saythe airline’s move shifts to them the risk for payingg out refunds if the carrier goes While it’s also likely to reduce the amounyt of money that United has to keep in the bank to guarr against charge-backs, it would increase those requirementd for the travel agents.
That’s a nonstartefr for most agencies — and thei banks, which would have to honor charge-bacj requests that could total billions of dollars in the evenyt of anairline bankruptcy. “I don’t think there’s any travel including AmericanExpress Travel, that coulsd shoulder that liability,” Casto said.
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