PayPal’s Airline Business Gains More Altitude with Continental

Continuing its conquest of the nation's air carriers, PayPal Inc. reports that it is now accepted on Continental Airlines Inc.'s Web site. Houston-based Continental's acceptance of PayPal leaves the nation's two largest carriers, American and United, as the only big domestic holdouts. Besides newly booked Continental, which claims to be the world's fifth-largest airline, PayPal's U.S. airline acceptors now include Northwest (the first, announced in late June 2007), Southwest, US Airways, Delta, Midwest, JetBlue, and AirTran, a spokesperson says. The spokesperson wouldn't say if more announcements are imminent, but says, “Over the last year we've signed eight airlines, that's a little more than one every two months. That's a pretty good clip for us.” PayPal's foreign acceptors include two low-cost carriers, United Kingdom-based Monarch and Malaysia-based AirAsia. A Continental spokesperson did not respond to requests for comment, but in a release the carrier said it wanted to add payment options for its customers. That's generally the story with PayPal's other airlines. Continental already accepted Bill Me Later Inc., the online credit system, and Western Union for bookings on its continental.com Web site. Carriers also are trying to displace checks and cash wherever they can, says James Van Dyke, president of Pleasanton, Calif.-based Javelin Strategy & Research. He notes that Dallas-based Southwest Airlines Co. on Tuesday said it would accept only credit and debit cards for in-flight drink purchases beginning Sept. 9. Southwest's flight attendants will use hand-held terminals from GuestLogix Inc. to handle the card payments. Several other carriers have banned cash in the cabin or added card payments as an option. “Everybody is more open to [payment] alternatives, even while they're advancing card-based payments at the expense of paper-based payments,” Van Dyke says. The retrofitting of the airline-owned Universal Air Travel Plan's switch so that it would link to other payment networks has played a major role in giving airlines more online payment options, such as PayPal, beyond general-purpose credit cards. In late July, Washington, D.C.-based UATP, which has links to 240 carriers worldwide, announced a deal with Bill Me Later that will enable carriers to offer that option. UATP also is working with Atlanta-based processor Acculynk Inc. to bring PIN-based debit purchase capabilities to airlines' Web sites (Digital Transactions News, Aug. 20).