How do booking agencies avoid credit card fees
I am curios about the following situation.
Let’s say I have a website where people can book flights.
They pay us with their credit card, and we are buying a flight ticket for them a few days later.
On average credit card companies take 2% of every transaction, i.e., in the above scenario they would get payed twice:
once when our customer pays us and once when we pay the airline.
Since this intermediate party seems like a very common situation, I am wondering if there are ways of only having to pay the credit card fees ones.
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I assume that your pricing structure is such that you are charging your customers more than the airline is charging you. You need to fit your expenses and profits into that delta.
Running each transaction through your corporate card is not the way you will be paying the airlines. You will have to establish with them another vehicle for transferring funds to them. They will dictate the mechanism and requirements.
If you buy in bulk, you can get a better credit card fee, so that will help. You could also arrange to pay the airlines (in this case) by some other mechanism like electronic payment. That would likely be efficient for both sides rather than running a lot of credit card payments.
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