CVFR Travel Group CEO Ram Chhabra has advised agents to take caution before adopting virtual credit cards as a method of remittance, warning it may be a breach of IATA conditions.
According to IATA’s Passenger Agency Conference Resolutions, clause 890 requires a travel intermediary to use either the passenger’s credit card when issuing tickets or a pre-approved corporate credit card.
Chhabra’s comments are in response to a recent report from virtual payments company Wex, which encouraged agents to use virtual credit cards to secure a speedy chargeback in the event of airline failure.
He said many airlines do not allow virtual credit cards to be used to issue tickets in adherence to IATA’s Resolutions.
“They don’t like virtual credit cards because these cards are often issued somewhere in Europe, and there are high merchant fees [which] the airline has to absorb,” Chhabra told travelBulletin.
The CVFR boss added these virtual credit cards are generally associated with a sole transaction before they are dissolved, making chargebacks an “administrative nightmare” due to refunds being possible up to two years after a ticket is issued.
Chhabra said agents should simply be smart when it comes to remitting airlines via traditional bank transfers, saying it is fine to pay major carriers like Emirates, Etihad Airways, Qatar Airways or Singapore Airlines as there is little to no risk of them going under.
Smaller airlines or regional carriers in remote parts of the world would warrant some extra security for payment, such as a credit card.
Chhabra added that agents should take comfort in the fact Australia’s geographical region is something of a security blanket, with the high financial barrier to operate an airline here meaning only carriers with financial surety can afford it.
