June 24, 2009
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News: United Makes Travel Agents Pay Fees
While lawmakers are battling over the Credit Card Fair Fee Act that would give merchants more leverage in negotiating interchange fees, some organizations are taking matters in their own hands. United Airlines is reducing expenses by cutting travel agents from accessing Airlines Reporting Corporation (ARC), the travel industry's transaction settlement and data information system to process the airline's ticket credit card transactions. United is now asking travel agents to process the credit card transactions themselves and then report it as a cash sale. Airlines have been processing the card transactions for travel agents and paying the interchange fees that networks charge for the use of cards. Under the new system, travel agents would be paying the transaction fees.
It's not yet known how this will affect travelers or travel agents; however, speculation is that the agencies will pass the expense onto the end consumer. Most likely, travel agencies will initiate a booking fee to cover credit card processing set up charges as well as the interchange fees; something they have not done in the past. There's always the other option, don't book United Airline tickets. United is the first major airline to take this type of action. It would be safe to predict that travelers will begin to see other major airlines jump on this same band wagon. Unfortunately, it's just one more case of big business and the credit card industry dumping on the small business owner and end consumer.
Consumers always have the option of going online and booking their own travel arrangements. But then again, how long will it be before the process is expanded to include online travel agencies as well. Certainly, these agencies would also institute a booking fee to cover the credit card processing expenses. And what about those United Mileage Plus customers; how will booking through a travel agent affect their miles. The whole process is apt to strain the relationship between United Airlines and booking agents.