By Bruce Parkinson
A 30-year Canadian travel agency with $3 million in annual sales was recently forced to put up a $100,000 deposit to obtain a merchant credit card agreement, says ACTA President David McCaig.
The agency eventually found better terms with a different supplier, but three months later it is still waiting for the return of its $100,000. McCaig uses the example to illustrate the shaky relationship between credit card companies, suppliers and the retail travel industry.
McCaig also cites a recent move by British Airways to terminate hundreds of Indian travel agencies from using its merchant fee account as another example of looming trouble. ACTA learned of this incident through its participation in the World Travel Agents Associations Alliance, where an Indian retail association raised the complaint.
The difficulties for Indian agents came in the wake of last year’s much-publicized move by United Airlines to cut selected agencies off from its merchant accounts. McCaig says these examples illustrate attempts by airlines to shift the cost and risk of merchant fees to travel agents and consumers.
‘ACTA supports the all-out efforts of ASTA in the United States to stop United from forcing agencies to use their merchant accounts instead of United’s account when booking United products,’ McCaig told an ACTA forum in Toronto last week. ‘If this bad idea spreads through the industry, many agencies around the world could be forced out of business, and others will have no choice but to increase service fees to cover costs.’
McCaig says ACTA is still working with the Federation of Independent Businesses to get a meeting with federal officials on several credit card issues. ‘One thing I am looking at is to recommend to the government to enable retailers to add the merchant fee to the consumer invoice,’ McCaig says.
In the meantime, ACTA has announced a new credit option for Canadian retailers through an agreement with merchant service agent SecuTrans Canada. The association says the agreement will enable member agencies to beat the terms, conditions and rates of any other such company in Canada. SecuTrans promises fast approval, a 92% approval rate without deposit requirement and processing fees of 1.76% for regular credit cards, 2.41% for most affinity cards.