Report by : Gan Yung Chyan
/ KUCINTA SETIA
Distributed to All Press & Travel Professionals
The International Air Transport Association (IATA) announced in its press release dated 8 January 2019 that its first IATA PAY ticket payment transaction in cooperation with the British financial technology company ipagoo was successfully tested.
IATA’s role is to develop an industry solution enabling airlines to make this payment option available on their websites. IATA PAY comes in as a feasible online payment method. The live test conducted with ipagoo was done under the UK’s Open Banking framework with IATA PAY pilot airlines including Cathay Pacific, Scandinavian Airlines and Emirates.
Now IATA offers airlines a new option. In their view, the new payment method will give airlines a more affordable solution, a highly secure transaction link and a shorter billing period, while simplifying the payment process and help airlines better retain customers.
For airlines, the advantages of IATA PAY are cheaper payment option compared to other alternatives, highly security, faster cashflow with instant/near instant payment to the merchant and simpler payment process resulting in fewer lost sales.
For passengers and airlines, the biggest benefit of this new payment method is that it eliminates unnecessary intermediate links, is more secure, and air tickets can be paid instantly.
At present, when passengers purchase tickets from airlines, they mainly use third-party payment platforms or credit cards and debit cards of different banks. The problems brought by this include that each transaction needs to provide a large amount of private information to the intermediate links. Passengers also need to pay a commission to the debit/credit card companies for the transactions.
It is also because of this reason that most airlines are more willing to sell tickets through their own channels, which will not only reduce the cost of each transaction, but also firmly hold the user data in their hands.
IATA PAY is part of the IATA Industry Support Program, a new payment method for passengers who purchase tickets directly from an airline's official website. This program encourages travellers to use direct debit transactions to pay directly to merchant bank accounts using personal bank accounts.
Aleksander Popovich, Senior Vice president of IATA Finance and Distribution Services, said, “Today's consumers, especially millennials (young generations), are looking forward to a variety of payment methods including mobile payments and peer-to-peer payments. IATA Pay came into being. At the same time, airlines are struggling to manage high credit card payments – up to $8 billion a year and is still rising, mostly due to payments made directly on the airline's official website.
One of IATA's strategic goals in introducing IATA PAY is to provide cost control support and financial sustainability to airlines.
Ipagoo CEO Carlos Sanchez said, “ipagoo's technology can provide safe multinational banking services for IATA. We are at the forefront of financial industry development and innovation, and are committed to help companies and their customers benefit the most from online banking."
At present, IATA also cooperates with Deutsche Bank to develop blueprints for the European market (excluding the UK). It is expected to be the first to test in the German market in early 2019.
IATA will also verify the feasibility of the concept and gradually promote it to other regions.
IATA has 290 member airlines around the world. Their regular international flights account for 82 per cent of the world's passenger traffic.
/ KUCINTA SETIA
Distributed to All Press & Travel Professionals
The International Air Transport Association (IATA) announced in its press release dated 8 January 2019 that its first IATA PAY ticket payment transaction in cooperation with the British financial technology company ipagoo was successfully tested.
IATA’s role is to develop an industry solution enabling airlines to make this payment option available on their websites. IATA PAY comes in as a feasible online payment method. The live test conducted with ipagoo was done under the UK’s Open Banking framework with IATA PAY pilot airlines including Cathay Pacific, Scandinavian Airlines and Emirates.
Now IATA offers airlines a new option. In their view, the new payment method will give airlines a more affordable solution, a highly secure transaction link and a shorter billing period, while simplifying the payment process and help airlines better retain customers.
For airlines, the advantages of IATA PAY are cheaper payment option compared to other alternatives, highly security, faster cashflow with instant/near instant payment to the merchant and simpler payment process resulting in fewer lost sales.
For passengers and airlines, the biggest benefit of this new payment method is that it eliminates unnecessary intermediate links, is more secure, and air tickets can be paid instantly.
At present, when passengers purchase tickets from airlines, they mainly use third-party payment platforms or credit cards and debit cards of different banks. The problems brought by this include that each transaction needs to provide a large amount of private information to the intermediate links. Passengers also need to pay a commission to the debit/credit card companies for the transactions.
It is also because of this reason that most airlines are more willing to sell tickets through their own channels, which will not only reduce the cost of each transaction, but also firmly hold the user data in their hands.
IATA PAY is part of the IATA Industry Support Program, a new payment method for passengers who purchase tickets directly from an airline's official website. This program encourages travellers to use direct debit transactions to pay directly to merchant bank accounts using personal bank accounts.
Aleksander Popovich, Senior Vice president of IATA Finance and Distribution Services, said, “Today's consumers, especially millennials (young generations), are looking forward to a variety of payment methods including mobile payments and peer-to-peer payments. IATA Pay came into being. At the same time, airlines are struggling to manage high credit card payments – up to $8 billion a year and is still rising, mostly due to payments made directly on the airline's official website.
One of IATA's strategic goals in introducing IATA PAY is to provide cost control support and financial sustainability to airlines.
Ipagoo CEO Carlos Sanchez said, “ipagoo's technology can provide safe multinational banking services for IATA. We are at the forefront of financial industry development and innovation, and are committed to help companies and their customers benefit the most from online banking."
At present, IATA also cooperates with Deutsche Bank to develop blueprints for the European market (excluding the UK). It is expected to be the first to test in the German market in early 2019.
IATA will also verify the feasibility of the concept and gradually promote it to other regions.
IATA has 290 member airlines around the world. Their regular international flights account for 82 per cent of the world's passenger traffic.
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