UATP To Enable U.S. TMCs As Issuers
By David Jonas
UATP for the first time will allow travel management companies to issue their own payment accounts. The program is starting in the United States as a means to accelerate UATP’s growth in the market. The payment network expects to announce the first TMC issuers later this quarter or next.
UATP is a payment plan created and owned by the airlines. Twenty-seven airlines today issue UATP cards, including Lufthansa through its AirPlus unit. Most of the world’s airlines accept UATP for payment, as do several rail carriers, more than 30,000 ARC-accredited U.S. travel agency locations and 130,000 other agency locations around the globe using the International Air Transport Association’s Bank Settlement Plan.
In talking to U.S. TMCs and online travel agencies about growing UATP volumes, “we kept hearing the same question as to why they couldn’t issue UATP directly,” said chief commercial officer David Holmes. “TMCs are uniquely positioned. They have the inside track on discussing form of payment and advising their customers” when they are considering payment system requests for proposals.
Participating agencies would earn incentives with each purchase. That comes out of the 1.75 percent standard rate paid by merchants accepting UATP. Holmes pointed out that other card programs in North America levy an average merchant service charge of 2.2 percent.
That airlines save on card acceptance costs has always been a UATP selling point. Holmes said agency issuers would get access to UATP’s data reporting tools. UATP’s website claims that “no other card brand can offer Level 3 data for every ticket regardless of which airline the ticket is purchased and what method of purchase (e.g., via a travel agency, online booking site or direct purchase at the airline).”
TMC-issued UATP accounts would work the same way as existing UATP programs. Clients would instruct the TMC to use the UATP account “lodged” in traveler profiles when booking travel with relevant merchants. Beyond air and rail transactions, TMCs also could use a UATP virtual payment solution to book hotels. TMCs would provide customer service and help clients manage the UATP program, just as airline issuers do today. Unlike airline issuers, TMCs would not become UATP shareholders.
UATP recently hired American Express alum Paul Swanston to head up agency sales. Holmes said discussions were underway with OTAs and traditional agencies “of various sizes and types.” Target users for TMCs would be clients interested in central billing.
He said that if the TMC program performs well in the United States, UATP would consider bringing it to more markets.
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