in Technology

New payment method for air tickets successfully demonstrated

Posted 8 January 2019 · Add Comment

The International Air Transport Association (IATA) has announced the successful completion of the first “IATA Pay” ticket purchase transaction in a live test environment. The transaction was conducted in partnership with ipagoo, a UK-based fintech company.

IATA Pay is an industry-supported initiative to develop a new payment option for consumers when purchasing a ticket directly from an airline website. It is made possible by the European Commission’s second Payment Services Directive (PSD2), and the UK’s Open Banking regulation. These regulations encourage use of so-called direct debit transactions in which payments are made from the customer’s bank account directly into the bank account of the merchant. This method offers an extremely high level of security to both user and recipient and can be instantaneous.

IATA’s role is to develop an industry solution enabling airlines to make this payment option available on their websites. The live test conducted with ipagoo was done under the UK’s Open Banking framework with IATA Pay pilot airlines, including Cathay Pacific Airways, Scandinavian Airlines and Emirates. 

For airlines, the advantages of IATA Pay are: 

    Cheaper payment option compared to other alternatives

    Highly secure

    Faster cashflow with instant/near instant payment to the merchant

    Simpler payment process resulting in fewer lost sales.

For consumers the benefits include access to a new, simpler method of payment that is highly secure. 

“Today’s consumers, and especially millennials, have expectations of multiple payment options including mobile and peer-to-peer. IATA Pay responds to these expectations. At the same time, airlines are trying to manage significant card payment costs -- $8 billion per year and rising. A large part of this cost is incurred in direct purchases from airline websites. One of IATA’s strategic objectives is to support airlines’ financial sustainability including controlling costs,” said Aleksander Popovich, IATA’s senior vice president of financial and distribution services.

Carlos Sanchez, CEO, ipagoo said: “We are delighted to have completed the first Open Banking live transaction for the airline industry, helping IATA and its member airlines to achieve their goals of operational and financial efficiency. ipagoo’s technology provides a secure, multi-country banking service for IATA. We are at the forefront of development and innovation within the financial industry and committed to helping businesses and their clients take advantage of the opportunities provided by Open Banking.” 

IATA is also working with Deutsche Bank on a prototype for Europe (excluding the UK), starting with the German market, which is expected to undergo testing in early 2019.

Following this, IATA will validate the concept with the intention to expand to other regions.

 

 

* required field

Post a comment

Other Stories
Advertisement
Latest News

SAA to apply no work policy and allow non strikers to work

South African Airways (SAA) said on Thursday a “no-work-no-pay” principle will apply to employees participating in the strike scheduled to start on Friday, 15 November and those who report for duty, will be allowed to work.

Rolls-Royce Trent 700 certified to power new Airbus BelugaXL Transporter

The Rolls-Royce Trent 700 engine has received certification to power the new Airbus BelugaXL air transporter.

Ethiopia to host Africa’s top summit

Africa’s most prestigious aviation event heads to Ethiopia for the first time, as Michael de Klerk reports.

Kenya Airways wins prestigious African Airlines Association Airline of the Year Award

Kenya Airways has received the prestigious African Airlines Association (AFRAA) Airline of the Year Award for Best Improved in Intra-Africa Connectivity.

Nigeria’s battle-ground

A price war has broken out between Nigeria’s two main ground-handling organisations, leading some to fear that safety could be compromised. Chukwu Emeke reports.

Air Senegal launches Dakar hub

The Senegalese national airline will launch many new routes in Africa (Nouakchott, Abuja, Lagos, Accra and Casablanca).

AVAFA20SK2207050320
See us at
Dubai AS BT2006211119AVMENA20 BT1309100620AVAFA20BT2207050320