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The latest move by United Air Lines terminating some U.S. agencies’ access to process credit card transactions on the airline’s credit card merchant agreements is troubling to the Association of Canadian Travel Agencies (ACTA). For those select agencies that received the notification by United, the options are to process transactions on their own merchant agreement or settle with United in cash.
ACTA president and COO David McCaig stated, “The news of United Air Lines’ action to encumber the ability for travel agencies to sell their product is very disconcerting to the Association and our members. Although this currently affects targeted agencies in the U.S., we are closely monitoring the situation for signs that the trend will cross the border.”
The American Society of Travel Agents (ASTA) quickly responded highlighting the impact to U.S. travel agencies. An enormous financial burden will be placed on agencies including an increased ARC bond with the increase of cash sales, the increased risk of credit card charge-backs and the costs involved in reprogramming the back office, mid-office, front office and consumer facing booking tools. Simply put, agencies now have to absorb United’s cost of doing business.
McCaig continued, “If your agency has received such a letter from United or any other travel supplier advice your ACTA regional manager immediately. We are working closely and sharing information with ASTA on this developing issue.” McCaig concluded “Merchant providers are becoming less amenable to the travel industry due largely in part to the recent well publicized failures of airlines. [They] have deemed retailers and wholesalers high risk and as such, we’ve noticed a continuing trend for increased rates and security bonds. The move by United will make the process of obtaining a merchant agreement even more difficult than is already. ACTA and CFIB warned the industry in March of this year that the increased merchant fees would indeed be a factor affecting the travel agency distribution model.”
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
