Wal-Mart Settles Foreign Transactions Through ARC

Wal-Mart last week became the first company to settle non-U.S. airline transactions through a U.S. point of sale, overcoming logistical hurdles with the support of American Airlines, ARC, Sabre and UATP.

Wal-Mart confirmed that it has been settling American Airlines transactions made in Canadian dollars and Mexican pesos solely through ARC, rather than other bank settlement plans. Now, Wal-Mart will be able to consolidate all North American transactions with its major network carrier into one settlement data stream.

While Wal-Mart intends to do this in other markets, ARC vice president of marketing, sales and customer care Mike Premo said, "The ARC prototype is limited in the number of countries. It's fair to say that all the work of all the parties in this thing have focused on a limited prototype sort of capability. There's some potential that we might be able to add one, two or three more currencies to the mix, but our prototype doesn't go beyond that."

Though this paves the way for additional currency settlements by Wal-Mart, it may prove difficult for other CTDs or travel agencies to quickly follow suit because of the tricky proposition of aligning airline, payment system and governmental cooperation.

Premo said this method of doing business is now available to other CTDs "if they can get a carrier to pursue it with them. I would describe this as a very, very baby step. There's a prototype software implementation for Wal-Mart that accommodates one form of payment and one carrier in two countries outside the U.S. It's a very modest, very small step." Premo said agencies are less likely to pursue the settlement method.

"It would be wrong to give people the impression that global Wal-Mart activity is all flowing through ARC, UATP, Sabre and GetThere and it's all a highly integrated solution. That's not the case. Wal-Mart has centralized a lot of their work and fulfillment activity in Bentonville, but with these two countries as exceptions, and only for this one carrier, everything is still being handled the same way any other corporation that might choose to try to do this would do it. You've got an exception for a carrier in two non-U.S. markets."

Even so, Premo said that Wal-Mart's new approach "is a first. It's been a lot of hard work and a lot of cajoling and threatening, and wailing and gnashing of teeth and rending of garments to get here."