BY FRAN DURBIN
WASHINGTON -- The Airlines Reporting Corp. is starting to
deposit funds electronically into the bank accounts of travel
agencies that use ARC to process the agency's service fees charged
to clients' credit cards, according to the corporation's president,
David Collins.
In an interview, Collins also said, "We have no plans at the
present" to change the 3.5% processing fee that ARC charges agents
for using the optional service.
Collins said the electronic payments, which were scheduled to go
into effect on Aug. 12, will help agents because ARC no longer will
cut a check that could be delayed in the mail and/or held by the
bank until it clears. The corporation already uses electronic funds
transfers in its regular program of processing agents' weekly sales
reports.
Since January 1994, ARC has been making electronic deposits,
instead of mailing checks, to agencies that have overages in their
sales reports. The separate processing program for service charges
was set up at agents' request in mid-1995, after the commission
caps prompted numerous retailers to impose or to think about
imposing service fees.
In keeping with an earlier commitment to confidentiality,
Collins said, he will not reveal the number of agents who are using
ARC to process service fees or the total dollar volume.
Under the program, agents submit separate weekly reports on
their service fees charged to clients' credit cards. ARC acts as
the credit card merchant and bills credit card companies, which pay
ARC and bill clients.
ARC then sends agents the money on a weekly cycle, minus the
3.5% processing charge and any refunds (if the agency allows its
service fees to be refundable). ARC sends the money 16 days after
the end of the reporting week (as opposed to the 10-day
draft/overage date after each sales reporting week) because it
waits to get paid by the credit card companies. Thus, the Aug. 12
electronic deposits by ARC were scheduled to pay agents for the
week ending July 27.
ARC's 3.5% processing fee is higher than most charged by credit
card companies when agents act as merchants. However, ARC has no
per-transaction fee, chargeback handling fee or monthly minimum
payment, although it does have a onetime $25 sign-up charge.