UATP’s CEO, president and chair Ralph Kaiser offers BTE an in-depth look at this unique card provider and its benefits for corporate travel
BTE: UATP has been a part of the airline industry since the early days of commercial aviation. Explain what makes UATP different.
KAISER: UATP was founded in 1936, and we have been and continue to be the best form of payment for control of data and costs. UATP is a charge card product like Visa, MasterCard and American Express with the major difference being that the cards you have in your pocket are issued by banks, whereas in the UATP Network, cards are issued by the airlines. The airline issuers act the same way your bank acts; they have billing systems, they send invoices, they collect money and they pay the merchant, which in our case are the other airlines that accept UATP. That’s the fundamental difference; think about it like any other card, but think about who is the issuing bank. Our issuers are airlines. We are really embedded inside the airline and travel industry more deeply than other card brands, so we settle within the airlines’ clearing houses, we are present in every BSP, and ARC, and we are implemented through every GDS, including Travel Sky in China.
BTE: So a major difference between UATP and other card brands is that you specialize in travel while the others card products are generalists, reaching out into different purchasing environments?
KAISER: Yes, and we’re a B2B only organization. B1 is an airline, B2 is a company like, let’s say, a Walmart or a Volkswagen. And a lot of times the UATP card is used to facilitate corporate deals, non-published fares and other negotiated arrangements. It’s a loyalty tool, it’s a cost-saving tool, and it generates revenue for airlines. When one airline’s card is used on another airline, the issuing airline gets paid for processing that transaction just the way other card companies do.
BTE: Is the purchase of airline tickets the only place where UATP can be involved in travel programs?
KAISER: I wanted to touch on that point. UATP also allows hotel bookings through virtual cards. We use virtual cards that run on another network, so a company could use UATP for its centralized booked air and hotel and it links back to one UATP statement. And then the traveler could have a card in his or her pocket for the non-air/hotel T&E.
BTE: With UATP’s integration into airline systems and the capabilities of virtual card technology, what does that mean for the travel manager?
KAISER: That’s a big plus. The travel manager gets Level III data on every traveler. Often you get a credit card statement with limited details that say, ‘You bought a ticket on United from Chicago to LA,’ but through UATP, the transaction is done by the airline that’s flying the passenger, so you get all of the Level III data; class of service, seat assignments, all of the city pairs. It’s the same data on the PNR, but it comes on the card statement. It also facilitates those non-published fares. Since UATP is the better form of payment for the airline, companies have the opportunity to negotiate corporate deals through the UATP program.
BTE: How does having a UATP card help streamline the back office processes?
KAISER: Reconciliation is one thing we hear in the market that is much, much easier with UATP. Agency fees can be processed on UATP and linked to that flight. And because UATP is embedded in all of the systems, things like refunds or chargebacks are standardized. Things like agency fees are tied to specific transactions, so instead of getting 15 service fees on your statement – where you have no idea which ticket they’re tied to – our billing statements can indicate cost centers that can be tagged to go towards a specific account or budget. For example, a big account like Walmart will buy all of its global air out of Bentonville, Arkansas with a lodged UATP account (issued by AA). They have a million employees, but they don’t have a million accounts. For them it’s an amazing way to manage and organize their travel spend, which is – as you can imagine – highly significant.
BTE: Besides virtual cards for hotel, we’re learning that UATP has gotten involved in alternate forms of payment. Tell us more about that?
KAISER: Alternate forms of payment are a completely different side of UATP that’s generally not the corporate sector. For example, if you go online and buy an airline ticket using your PayPal account, or Alipay or one of hundreds of other alternative payment brands, I would say there’s probably a 98 percent chance that it’s running on UATP rails behind the scenes. That’s a really nice complementary business because it doesn’t conflict with our core corporate charge product. BTE: What other new initiatives do you have coming up?
KAISER: I could see us facilitating virtual accounts for rental cars. That is something that’s under consideration. But one of the big initiatives we’re working on is that we want to get UATP accounts embedded with companies like Uber and Airbnb for corporates because those are perfect companies for a lodged card environment. That will really expand the reach and utility of UATP beyond where it is today. An air-only product sometimes seems limiting for a company, but because of the added benefits, it’s worthwhile to have.
BTE: What’s the main objection you run into when you talk to corporate travel buyers?
KAISER: I think the main pushback is that corporations have become pretty well addicted to rebates from other commercial cards. What they need to understand is that the rebate is really being paid by fees the other card brands collect from the airline. With a UATP account, the airlines might not be able to give you a big rebate, but what they’re going to do is give you things like discounted fares, non-published fares and other features. Those are all things that are on the table. So if a corporation really wants a managed travel program with no leakage, then UATP is really the most effective tool. If your spending is lower because you’re getting better fares, that’s way more lucrative than any rebate. Because that’s money that is not ever going out the door.
BTE: What else do you feel is important for travel buyers to know about UATP?
KAISER: It’s very important for us to get our message out. We’re a niche player but we need to be a bigger niche. We are in every market around the world and we are the only card product integrated in every IATA BSP. We have a very big program in China. We’re going to move into India next and are getting more active in Africa. For global companies, we have global solutions. We are 100 percent truly cross border. There’s no market where UATP is not accepted, because wherever an airline flies, UATP can be used to buy air there. And the data is all standard globally too. We are intent on growing. We want the value to companies to be increased, so we want companies to tell us what they want. And we will be more than happy to oblige.