(February 17, 2009) Universal Air Travel Plan Inc. is still in growth mode despite some weakness in its core corporate travel business, thanks in part to an ongoing alternative online-payments initiative that started in 2005. Now the specialty payment processor is looking to sign hotels as merchants.

Processing volumes rose about 20% last year for Washington, D.C.-based UATP. “In 2007 we broke the $10 billion mark; in 2008 we were at $12 billion,” president and chief executive officer Ralph Kaiser tells Digital Transactions News by e-mail. “Our profitability is not public, but suffice it to say 2007 was a good year and 2008 was even better.”

UATP has 19 airline shareholder-owners worldwide. Thirteen issue its card, and its brand is accepted by nearly 250. Online payment systems are an increasingly important part of the mix as UATP seeks to offer airlines new product offerings beyond its core corporate travel card, especially ones that cost the carriers less to accept than general-purpose credit cards (Digital Transactions News, Aug. 20, 2008). Already accepted or planned payment brands usable through UATP include PayPal Inc., Bill Me Later Inc. (recently acquired by PayPal parent company eBay Inc.), Moneta Corp., the PIN-based specialists HomeATM and Acculynk Inc., and prepaid cards through Ceridian Corp.’s Stored Value Solutions.

“We’re seeing a little bit of softness in our core business,” says Scot Bealer, UATP’s vice president of worldwide sales and marketing. “These alternative forms of payments have a lot of room [to grow] in terms of cutting expenses for the airlines.”

Bealer declines to say exactly how much volume the alternatives are bringing to UATP, but says the year-over-year growth rate “is significant, as in triple digits,” and generating “hundreds of millions in dollar volume in aggregate.”

PayPal is “the leader in terms of volume growth” at UATP, according to Bealer. Nine airlines now take PayPal through the UATP switch—the result of a quiet but lengthy operational effort. The other announced partners are just launching or working on the back-office operations necessary to make acceptance work through UATP. Delta Air Lines Inc. currently is UATP’s only carrier live with Moneta. Continental Airlines Inc. has a direct connection to Bill Me Later that pre-dates UATP’s initiative.

Besides airlines, UATP’s current merchant acceptors are travel agencies—some directly but most through merchant acquirers and connections to specialist ticket processors—and Amtrak. Now the company is looking to sign other travel-oriented merchants, especially hotels. Bealer won’t give details yet, but says, “we are in fact doing some work in the hotel realm; we have some test transactions we’re processing.”

Part of the strategy to broaden UATP’s utility beyond corporate travel bookings by making leisure travel possible through its network. “We’re almost reinventing ourselves,” Bealer says. “Originally our focus was on the corporate market.”

Doing so, however, makes UATP even more of a competitor of American Express Co., the travel-and-entertainment card leader. But Bealer says UATP has some advantages, especially on price. AmEx’s average worldwide discount rate was 2.53% of the sale in the fourth quarter. UATP’s standard merchant pricing is 1.75%.