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United Again: Expands Credit Card Merchant Transfer

April 20, 2010 By: George Dooley

United Airlines notified agents that it was changing its merchant of record agreement from United to the consolidator, effective April 19. The carrier said it was sending out a new base amendment with the added merchant of record language that required agents' signatures.

The new agreement impacts the terms and conditions for net fares, the percent off published agreement and group requirements. It is also believed that some of the agents targeted serve the Asia- South Pacific market.

The agreement says that the agent will be the merchant of record and, therefore, responsible for all credit card sale fees (or similar charges, including interchange fees, regardless of payment vehicle) related to the payment or processing of any discounted tickets. This includes, but is not limited to, net fares or percent off published products that are sold based on percent off published reservations.

United must not incur any credit card sale fees (or similar charges, including interchange fees, regardless of payment vehicle) for any account fare tickets. A $75 per ticket charge will be assessed via debit memo. Sales made using the Universal Air Travel Plan (UATP) card are permitted.

Payment reconciliation shall be in cash and not via any type of credit card (or other payment vehicle), United says. The agent may not pay United for account fare tickets using an MCO.

ASTA is aware of United’s move and has notified its members.

“While United (UA) has not expanded its credit card transfer initiative to additional retail travel agents, several consolidators have reported that UA has transferred the merchant of record responsibility from UA to consolidators with 'net' and 'percent off' marketing agreements,” ASTA said in its analysis. “UA’s 'net' agreement allows an agent to act as a consolidator by allowing the agent to mark up the ticket price that is offered to consumers and/or other travel agents. UA’s 'percent off' agreement allows an agent to collect upfront commissions in certain markets. Affected consolidators that use UA’s merchant agreement to process credit card payments will be assessed a $75 per-transaction fee. This action appears to be designed to bring some nonconforming consolidation contracts into UA’s pre-existing policy on merchant account usage that has been in place for some time. The result of this unbundling of credit card costs will likely be a shift in costs to consumers. To cover this additional cost burden, affected consolidators will likely have to: 1) increase fares; 2) add a credit card surcharge if allowed by the state; or, 3) accept “agency check” only.”


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