UATP partners with BitPay to enable cryptocurrency payments for travel
Sep 8, 2021
UATP, a payment network owned by 34 airlines including United, Lufthansa, Delta and Air China and is used by more than 250 carriers as well as travel agencies and rail carriers, is partnering with BitPay to enable payments in cryptocurrency.
This is UATP’s second attempt to help its merchants accept cryptocurrency for travel bookings. In 2015, the payment processor partnered with Bitnet to enable such transactions, but UATP CEO Ralph Kaiser says the effort dissolved a short time later when Bitnet “went dark.”
Recently, says Kaiser, interest in cryptocurrency has picked up among UATP’s merchants, in part due to the recent news that El Salvador has made Bitcoin, the world’s biggest cryptocurrency, legal tender.
“There are a lot of airlines in North America and Europe that would be interested in taking Bitcoin or any cryptocurrency, they just don’t know how. And everyone’s waiting to see who goes first and what will happen,” Kaiser says.
“We think this will happen now because there’s actual demand because of a government’s decision – although it’s a small country – we’ve had two to three airlines say, ‘We need to be able to sell in crypto in El Salvador. Can you help us?’ And we always try to meet the demand in the market for our airline members.”
Kaiser says UATP has chosen to work with BitPay – which has been processing cryptocurrency payments for AirBaltic since 2014 – because the company has a solid reputation and has proven it can handle live transactions.
UATP merchants will be able to accept payment in Bitcoin, Dogecoin, Ethererum, Litecoin and six other popular cryptocurrencies. BitPay will reconcile the transaction and pay suppliers directly in their local currency, cryptocurrency or a combination, and in the amount that the supplier charged at the time of booking – in effect removing the risk of currency fluctuation.
“There is a risk that a Bitcoin price today will not be the same price in three days or five days or 17 days when it’s settled. What we are going to be able to do is take that risk away for the buyer and seller by partnering with a company who will wear that risk and will process that cryptocurrency,” Kaiser says.
“Of course it’s not free, but it’s going to be less expensive with no risk than I would say your traditional forms of payment.” According to the BitPay website, its standard fee is 1%.
Kaiser says UATP is continuing to monitor new types of demand emerging from travelers, both business and leisure, to determine how its future payment strategies will develop.
“PayPal used to be considered an alternative payment brand, and now they are second biggest used brand online, after I think MasterCard. So you can see how thing evolve. Bitcoin got a bad reputation early, I think, because it was always sexy to write about weird stories that happened with Bitcoin, but it’s a store of value and there is trillions of dollars now worth of this store of value,” he says.
“Crypto payment stands to be a market changer in the industry; this partnership creates the opportunity for the airlines to attract new customers and to be a first-mover in this very exciting space.”
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