Occasionally there are corporate deals that may seem insignificant to the average person but make a huge difference. They usually get into the wonky details of how things happen behind the scenes. In 2010, Google purchased ITA Software. While that might not mean anything to you, it led to the legs getting chopped off of the amazingly useful ITA website and Google trying to move users to the less adaptable Google Flights website.
There are other instances where a company changes a provider of service to the detriment of its members. For instance, in 2018, Chase stopped using cxLoyalty as the travel provider for the Ultimate Rewards website and changed to Expedia for bookings. Many people noticed that prices for travel bookings became more expensive after the changeover. Another change for Chase customers was that the Walt Disney World hotels were no longer bookable through the website.
Apparently, Chase customers weren’t the only ones not satisfied with Expedia’s services. This is totally understandable because Expedia sucks. They were the ones who kept trying to arrange a ride to a London airport for a reader long after he’d arrived back in the US.
Chase made a bold move earlier this week and agreed to acquire the technology platforms, travel agency, gift card and points businesses of cxLoyalty Group. That’s right, JP Morgan Chase is buying the company they stopped doing business with when they changed to Expedia. I guess it’s the ultimate example of, “if you can’t come to a business deal, just come back later and buy the whole company.”
Obviously, this will mean that the Chase Ultimate Rewards portal will be leaving Expedia and moving back to the old platform once the deal is complete. After all, why would Chase use Expedia when they own their own travel booking company?
But what will be the collateral damage of this deal? cxLoyalty currently serves many of the biggest U.S. card companies, including Citigroup, Capital One, U.S. Bancorp and Mastercard. Overall, cxLoyalty Group says it has 3,000 clients and marketing partners that serve 70 million consumers.
If you’re Citi, will you keep using a company owned by your competitor to make your travel bookings? Every award redemption through the ThankYou portal will put money into JPMorgan Chase’s pocket. The same goes for Capital One and everyone else who currently uses cxLoyalty’s services. That’s not a position a bank wants to be in. So where do you go? Expedia? The company that Chase just bought an entire travel booking service just to get away from?
I’ll leave this story as “developing.” It seems that Chase felt it was worth the price of possibly losing all of the other banks as customers to get access to the systems cxLoyalty used for booking awards. Or maybe Chase was so unhappy with Expedia and had no other options available. It may have been cheaper to just buy the company instead of trying to renegotiate a new deal. Unless you’re a member of JPMorgan Chase upper management, you may never know the answer.
I’ll say that this is a win for Chase customers. As for the other banks, it remains to be seen what the fallout of this merger will be.
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This post first appeared on Your Mileage May Vary
1 comment
As long as you can wipe restaurant and grocery store credits at 1.5c, the Chase travel portal is a moot point anyways. I’ve noticed almost all flights are 10% higher then what the airline is charging down to the penny, so you’re really getting 1.4c per point. Unless they started showing prices that were the same price or even cheaper than what the airline is offering, consumers should see little reason to use the Chase portal as long as the “Pay yourself back” feature remains. Speaking of rumors, there is a lot of rumors that Chase may make the feature permanent. Capital One also lets you wipe statement credits at 1c each which is good value for those points. That leaves Amex and Citi. Hopefully this will light a fire under their feet to really provide a good alternative to transferring points as nobody wants to burn amex points on a portal at 1c each, they’re too valuable.