BA, Amex Clash On Merchant Fees

American Express, in response to British Airways' move over the weekend to cease paying merchant fees charged by credit card companies for corporate net fares deals in the United Kingdom, began applying a 2 percent "payment handling fee" on all BA corporate net fare bookings for all U.K. corporate card programs, including central-bill accounts.

According to sources, a Monday meeting between high-level officials at American Express and British Airways did not bring the amicable resolution sought by American Express. As a result, the agency this week sent a letter to corporate clients, obtained by Business Travel News, stating its belief that BA has breached its contract and "is in violation of the merchant card agreement with American Express." According to the letter, American Express will take additional action as deemed appropriate.

"BA's decision not to accept any card for net fares will, in effect, deny those travelers and corporations the savings and service benefits they receive when using a T&E card for payment," the letter said. "We also understand that BA is not implementing this policy for some companies that have threatened to move their travel to other carriers."

An American Express spokesperson said, "We continue to discuss this situation with British Airways and continue to look for a resolution."