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.
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“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.”