NewGen ISS Airline FAQ

Transcription

1 NewGen ISS Airline FAQ What is NewGen ISS? NewGen ISS (New Generation of IATA Settlement Systems) is a programme designed to modernize the current BSP, delivering more choice and flexibility to Travel Agents and Airlines while reducing risk and ensuring safer selling. Why is IATA rolling out NewGen ISS? Launched in 1971, the Billing and Settlement Plan (BSP) was built for a bricks and mortar world which no longer reflects the diverse and complex business needs of Travel Agents and Airlines. Today, the travel industry is undergoing significant transformation. IATA developed NewGen ISS to respond to these changes and create a system which is fit for today and the future. To achieve this, IATA NewGen ISS is introducing greater choice of accreditation models, enhanced risk management, new payment methods and financial security options.

2 What are the main initiatives under NewGen ISS? NewGen ISS is comprised of four initiatives: Agency accreditation models: NewGen ISS moves away from the one-size-fits-it-all approach to accreditation by offering Agents the choice of three accreditation models. The new models are designed to reflect the diverse array of Agents using the BSP and to widen access to IATA Accreditation, creating opportunities for Airlines to expand their distribution network. IATA EasyPay: a new voluntary pay-as-you-go e-wallet, which enables Travel Agents to easily and securely pay for tickets in the BSP. With IATA EasyPay, there is no risk of chargebacks and Airlines receive funds owing hours following ticket issuance. Remittance Holding Capacity (RHC): a monetary threshold for Travel Agents outstanding BSP Cash sales, which will be assigned to all Agents with a Cash facility. RHC is designed to promote safer selling and mitigate airlines risk exposure in the BSP. Global Default Insurance (GDI), a new choice of financial security available to Agents. What are the benefits of NewGen ISS for Airlines? NewGen ISS will create a safer selling environment for Airlines by significantly mitigating Airlines exposure to default losses. In addition, through IATA EasyPay, Airlines benefit from a secure, cost effective new payment option. This new payment method also creates an opportunity for Airlines to define their overall payment strategy. The new accreditation models will enable Airlines to expand their distribution channels to a wider range of Travel Agents, while mitigating the associated risk of a larger network. What are the new accreditation models? Under NewGen ISS, Agents will be able to choose from the following three accreditation models: GoStandard, which is based on the current accreditation model, GoLite which is a lighter and simpler accreditation, and GoGlobal for multinational Agents operating in various BSPs. At the time of the rollout of NewGen ISS, any previously accredited Travel Agents will fall into the GoStandard model with the ability to convert to GoLite or GoGlobal.

3 What are the features of the new accreditation models? GoLite accreditation offers a simpler and more flexible accreditation process for current and nonaccredited Agents. Travel Agents under this accreditation model are able to transact in the BSP using customer cards or IATA EasyPay, a pay-as-you-go e-wallet solution. However, they will not have access to the BSP Cash facility. As a result of the reduced risk, Travel Agents opting for this accreditation model will be subject to fewer financial requirements. GoStandard accreditation is for Agents accredited in one market with access to all forms of payment, including a cash facility. While this model is based on the traditional accreditation, it introduces two new components: IATA EasyPay, a pay-as-you-go solution for Agents; and a new risk management framework. This includes the implementation of a Remittance Holding Capacity (RHC), or maximum threshold for Agents outstanding BSP Cash sales, which will significantly reduce default losses for Airlines. Agents under the GoStandard accreditation model will continue to undergo annual financial reviews under the local financial criteria applicable to their market. GoGlobal accreditation offers a streamlined process for large, international travel agencies, allowing them to maintain one accreditation for all BSPs they participate in, and to comply with a single global set of financial requirements. Agents will have access to all payment options, and will also be subject to a Remittance Holding Capacity (RHC), applicable to all their locations worldwide. Agents accredited under this model will undergo quarterly financial assessments under a Multi- Country Assessment Framework. How will Airlines be able to identify an Agent s accreditation model? An Agent s accreditation model will be captured on the Airline Bulletin. In addition, Airlines subscribing to the Global Data files will have access to this information. What is IATA EasyPay? IATA EasyPay is a new voluntary pay-as-you-go e-wallet, which enables Travel Agents to easily and securely pay for tickets via the BSP. IATA EasyPay is an industry payment method exclusively for payment of tickets in the BSP and will be available to Agents in addition to the traditional BSP Cash and Card payment methods. With IATA EasyPay, funds owing for a ticket are secured at the time of ticket issuance and there is no possibility of chargebacks, reducing the financial risk for Airlines.

4 Are Airlines required to accept IATA EasyPay? IATA EasyPay is optional both for Travel Agents and Airlines. Once IATA EasyPay is introduced in a market, it will be available to all BSP participating Airlines by default. Airlines may opt out of accepting IATA EasyPay as a form of payment should they wish to do so. IATA EasyPay is an enabler of the NewGen ISS programme as it offers a means for Agents to continue ticketing should they reach their RHC. Any Airline opting out of accepting IATA EasyPay in a BSP should assess the commercial and potential legal implications. What are the benefits for Airlines of accepting IATA EasyPay? IATA EasyPay offers a number of benefits for Airlines. These include: Reduced risk: When an Agent issues a transaction with IATA EasyPay, the applicable funds are blocked in the Agent s wallet at the time of ticket issuance. Once blocked, these funds can no longer be used for other purposes. Accordingly, with IATA EasyPay, there is no risk of Agent default as with BSP Cash sales, and unlike with Credit Cards, there is no risk of chargebacks. Accelerated cashflow: IATA EasyPay payments are settled to Airlines via the BSP within hours following ticket issuance, which helps accelerate Airlines cash flow. Cost Effectiveness: IATA EasyPay is an industry payment solution which works on a cost recovery basis, providing a cost-effective alternative to other payment methods. Global Availability: Once NewGen ISS is rolled out, IATA EasyPay will be implemented and available to all Agents across all BSP markets. How are IATA EasyPay transactions reported? IATA EasyPay transactions are a distinct form of payment from Cash and Customer Card. Accordingly, IATA EasyPay transactions are reported to Airlines on the HOT files with either the form of payment type EP or CCEP, per each Airline s choice. On the BSP Billing Reports, IATA EasyPay transactions are reported with EP as the form of payment. To find out more on the IATA EasyPay reporting, and the technical readiness requirements, please refer to the IATA EasyPay Airline Readiness Guide. What is the IATA EasyPay (IEP) number? IATA EasyPay numbers are digit, single or multi-use numbers which Agents enter in their GDS during ticket issuance. The IEP providers work with specific payment network schemes (UATP or Mastercard), and these networks have allocated BIN ranges exclusively for the use of IATA EasyPay. Given these dedicated BIN ranges, IATA s Data Processing Centre identifies IATA EasyPay transactions, ensuring they are reported to Airlines with the form of payment EP or CCEP, and excluding them from any CSI (Credit Card) files.

5 How are IATA EasyPay amounts settled? IATA EasyPay amounts are settled to Airlines via the BSP similar to BSP Cash transactions. Amounts will be transferred daily to the same bank account as used for the Airline s BSP Cash settlements, approximately hours after a ticket is issued. What is the cost of IATA EasyPay? The cost of IATA EasyPay is approximately USD 0.53 per transaction. Can you explain what the Remittance Holding Capacity is and what it means for Airlines? The Remittance Holding Capacity (RHC) is the maximum amount of Cash Sales that an Agent may have outstanding, pending remittance to the BSP. All Agents with access to Cash under NewGen ISS are assigned an individualized Remittance Holding Capacity. The Remittance Holding Capacity mitigates Airlines exposure to Agent default losses and promotes safer selling in the BSP. Can you explain how the Remittance Holding Capacity (RHC) will be calculated? The applicable RHC calculation is determined by an Agent s overall risk status as shown here: Risk Status A B C Remittance Holding Capacity Calculation Total Days X Daily Average BSP Cash Turnover (3 Highest Reporting periods) + 100% Remittance Holding Capacity = Financial Security Amount Provided Total days = Number of days in Reporting period plus number of days in Remittance period. Daily Average BSP Cash Turnover (3 Highest Reporting periods) = Agent s Average daily BSP cash turnover for the 3 highest Reporting periods of the previous 12 months. 100% (or x2) represents the year-over-year growth threshold.

6 What happens if an Agent reaches their Remittance Holding Capacity? If an Agent reaches their RHC, Cash as a form of payment is restricted until a remittance is received and the Agent s total amounts outstanding fall below the RHC. The Agent will be able to continue ticketing using other forms of payment like IATA EasyPay and Customer Cards. What measures are available for Agents to manage their RHC? Agents can monitor their RHC usage directly via the Portal. In addition, Agents will be notified when they reach 50% and 75% of their capacity, so as to be able to take applicable actions before they reach their RHC. A notification will then be sent if ever Agents reach 100% of their RHC. Once the RHC is reached, Agents can continue ticketing using other forms of payment like IATA EasyPay and Customer Card. In addition, Agents can remit monies to the BSP in advance of the remittance date (full or partial billings) to re-open the related capacity. At any point, Agents may also increase or decrease their Remittance Holding Capacity by amending the Financial Security amount provided. Will airlines be advised of Agents individual RHC? No. Airlines will be advised of Agents Risk Status but not of their assigned RHC. What is Global Default Insurance? For Agents required to provide IATA with a Financial Security, Global Default Insurance (GDI) is an alternative to other acceptable security types under Resolution 850p. GDI consists of a global default insurance policy. Individual Agents may, on a voluntary basis, apply to be insured under GDI for the amount of Financial Security required by IATA. What are the benefits for Airlines? GDI is offered by a top-rated credit insurance provider, Euler Hermes a subsidiary of the Allianz group. This provides Airlines with certainty of claims in case of an Agent default.

7 What do I need to do to prepare for NewGen ISS? With the implementation of NewGen ISS, Airlines should consider their strategic, organizational and technical readiness for the NewGen ISS changes. In particular, technical developments are required for Airlines to accept IATA EasyPay transactions. To find out more, please download the IATA EasyPay Readiness Guide. What is Resolution 812? Resolution 812 comprises the sales agency rules under NewGen ISS, and includes provisions related to the new accreditation models, IATA EasyPay and the Remittance Holding Capacity. BSPs will be migrated from Resolution 818g to Resolution 812 when NewGen ISS is implemented. Who approved the NewGen ISS changes? The Passenger Agency Conference (PAConf) which governs matters relating to the relationship between Airlines and IATA accredited Travel Agents adopted the NewGen ISS Passenger Sales Agency Rules included in Resolution 812 in November The adoption of this Resolution will allow for the global rollout of NewGen ISS across all BSPs. I m an Airline representative and would like to receive more information about IATA NewGen ISS related to my local market. Who should I talk to? Please contact us at newgeniss@iata.org for more information.