NewGen ISS. Travel Agent Readiness Guide. February 2018 Version 1.0

Transcription

1 NewGen ISS Travel Agent Readiness Guide February 2018 Version 1.0

2 Page 2 of 34

3 CONTENT The end-to-end process Airlines participating to IATA EasyPay Accreditation Models Remittance Holding Capacity (RHC) Global Default Insurance (GDI) Strategy Periodical billing reports BSPlink IEP Online Billing Reports Page 3 of 34

4 GLOSSARY ACM ADM BSP Acronym BSP Cash BSP CA BSP Card BSP Credit Card BSP CC BSPlink CA CC CC FOP DISH DPC EP Code EP FOP ewallet FOP FOP EP / CC GDI GDS HOT IATA IEP ISS NewGen ISS PAConf Pay-as-you-go PSG RET file RHC SCU Agent Credit Memo Agent Debit Memo Billing Settlement Plan Meaning Customer pays with any form of payment. Then Travel Agent collects the funds on behalf of the Airline and settles to an IATA bank account as per remittance calendar in the specific BSP Credit Card of the of the customer is used to purchase a ticket on the merchant of the Airline Internet-based system which facilitates interactions and exchanges of information between all participants in the BSP Cash Credit Card Credit Card Form of Payment Data Interchange Specifications Handbook Data Processing Centre IATA EasyPay Code IATA EasyPay Form of Payment Electronic wallet / digital wallet to be used online, where users can store, send and receive funds Form of Payment IATA EasyPay Form of Payment / CC Form of Payment Global Default Insurance Global Distribution Services Hand Off Tape = Airline Accounting / Sales Data International Air Transport Association IATA EasyPay IATA Settlement Systems New Generation of IATA Settlement Systems Passenger Agency Conference Refers to IATA EasyPay solution which funds must be available at the time of ticket issuance Passenger Agency Conference Steering Group Reporting file between GDS and DPC Remittance Holding Capacity Standard Charging Unit Page 4 of 34

5 OBJECTIVE OF THE DOCUMENT The NewGen ISS (New Generation of IATA Settlement Systems) Agent Readiness Guide aims to support the approximately 40,000 Accredited Travel Agents using the BSP globally in preparing for the introduction of NewGen ISS. The goal is to facilitate this process for Travel Agents to begin using it within their organization and simplify the effort required from Travel Agents to gather information. This manual will be regularly updated with the latest information and best practices learned throughout the course of the NewGen ISS deployment. Please note this guide focuses mainly on IATA EasyPay (IEP), one out of four pillars of NewGen ISS. This guide should be used by each Travel Agent with care and diligence, taking into consideration its own situation and market conditions. GENERAL STRUCTURE OF THIS DOCUMENT This guide consists of two main sections: The first section provides an overview of NewGen ISS. The second section covers the introduction of IATA EasyPay. SUPPORT INFORMATION For further information regarding NewGen ISS, please visit: The latest version of the Travel Agent Readiness Guide will available on the site. Page 5 of 34

6 NEWGEN ISS PROGRAM NewGen ISS aims at transforming the current ISS business model which facilitates the distribution and settlement of funds between Travel Agents and Airlines (indirect sales). Since its launch in 1971, the Billing and Settlement Plan (BSP) has successfully facilitated the distribution and settlement of funds between Travel Agents and Airlines safely and securely. However, many of the rules governing the BSP were established in an era of paper ticket stock, brick-and-mortar Travel Agents, limited payment methods and a highly regulated Airline industry. These rules no longer address the diverse and complex needs and risks of Airlines and Travel Agents today. IATA Settlement Systems are the financial back office of the air transport industry. Since its introduction, the BSP has successfully facilitated the distribution and settlement of funds between Travel Agents and Airlines, which totaled around $220 billion in But the one-size-fits-all model launched in 1971 no longer fits today s vastly different operating environment. NewGen ISS will ensure that IATA s Passenger Agency Program continues to deliver value to Travel Agents and Airlines by providing new options, greater flexibility and promoting safer selling. NewGen ISS is a strategic program aimed at transforming the current BSP system into the modern world by delivering simplified processes, lower costs, increased funds protection, new payment methods and a choice of Travel Agent Accreditation Models. With the introduction of NewGen ISS, IATA will provide an enhanced customer support to better address the needs of Airlines and Travel Agents. The program is composed of four interconnected pillars: IATA EasyPay, which introduces a new, secure payment method based on a pay-as-you-go model for tickets issued through the BSP. New Agency Accreditation Models that better fit a Travel Agents needs and business models. Safer selling, through the implementation of a monetary threshold for Travel Agents outstanding monies at risk known as Remittance Holding Capacity. Global Default Insurance that offers Travel Agents a new and optional financial security solution to what is already available in the market. Page 6 of 34

7 WHY IS IATA INTRODUCING NEWGEN ISS? NewGen ISS is focused on maintaining the long-term relevance of the BSP while the distribution landscape is evolving rapidly. Travel Agents and Airlines increasingly come in range of shapes, sizes and business models. Similarly, new distribution and payment channels have emerged outside the traditional BSP channel. In order to ensure that the BSP meets the needs of Travel Agents and Airlines, the BSP needs to adapt to this changing environment. Under NewGen ISS, IATA is moving away from a one-size fits all approach and towards greater segmentation with new Accreditation Models, more targeted risk management based on a Travel Agent s risk profile, and new ways of doing business in the BSP through the introduction of IATA EasyPay. Regardless of a Travel Agent s risk status or past sales history, today there is no maximum amount of monies at risk that a Travel Agent may have outstanding to the BSP at a given moment in time, e.g. no maximum risk exposure. NewGen ISS is also tackling this flaw in the current risk management framework, as it has resulted in a number of multi-million dollar defaults in past years. To address the risk, NewGen ISS will establish an individualized threshold for each Travel Agent s maximum outstanding cash funds held in trust pending remittance to the BSP (e.g. Remittance Holding Capacity or RHC). If a Travel Agent reaches this maximum capacity then Cash as a form of payment will be restricted until a remittance is made and the Travel Agent again falls below its RHC. Measures will be in place to facilitate the introduction of an RHC and allow continued selling, but this measure is an important step to promote safer selling and protect the integrity of the system for legitimate Travel Agents. Page 7 of 34

8 BENEFITS OF NEWGEN ISS Travel Agent Benefits Airline Benefits IATA EasyPay (IEP) Reduction of Financial Securities New funding alternatives Access to more accreditation options and ability to sell upon reaching the RHC Cash flow acceleration Increased collection of funds Bespoke payment strategy GoLite Accreditation Model Easier financial requirements Entry point into the BSP Wider distribution network without increased financial risk GoStandard Accreditation Model GoGlobal Accreditation Model Increased flexibility moving away from the on/off ticketing environment of today Simplified processes & operational efficiencies Cost Savings (consolidated global financial statements rather than local financial statements) Safer selling for Cash sales, the most cost effective payment method for Airlines Smarter Risk Management of the entire Travel Agent group Visibility on Multi-Country Travel Agent sales activity Remittance Holding Capacity (RHC) A more secure selling environment for all participants Reduced pressure on Local Financial Criteria Limited risk exposure and a reduction of default losses Global Default Insurance (GDI) Additional choice of Financial Security Cost savings Flexibility to easily adjust Remittance Holding Capacity Certainty of claims Page 8 of 34

9 IATA EASY PAY (IEP) The introduction of a new pay-as-you-go solution for tickets issued via the IATA BSP is one of the pillars of the NewGen ISS program. This new solution consists of a private, closed-loop and proprietary travel industry B2B payment method for IATA Accredited Travel Agents to issue Airline tickets through the BSP. IATA EasyPay (IEP) is based on an electronic wallet (e-wallet) model 1, therefore, it is a secure payment whereby funds are secured at the time of ticket issuance (e.g. a Travel Agent can only use IEP as a form of payment if the Travel Agent holds sufficient funds in its IEP account prior to ticket issuance). IEP is additional and does not replace any of the existing forms of payment. IATA EasyPay is distinct from BSP Cash and BSP Credit Card in the reporting and has its specific rules, cash flow calendar and cost. 1 Subject to local regulations and capabilities. Page 9 of 34

10 IATA EASYPAY AS AN ENABLER OF NEWGEN ISS The introduction of IEP is the key enabler to facilitate the implementation of the new Travel Agent Accreditation Models. IEP will be an available payment option for all Accreditation Models, but will be specifically important for Travel Agents under GoLite as those Travel Agents will not have access to Cash. In addition, once a Travel Agent with access to Cash sales reaches its RHC, Cash sales will be restricted. The Travel Agent will be able to continue issuing tickets via IEP or other alternatives other than Cash. Please refer to section Remittance Holding Capacity (RHC) for more information. Page 10 of 34

11 IATA EASYPAY BENEFITS FOR TRAVEL AGENTS IATA EasyPay will bring several benefits for Travel Agents as IATA EasyPay is entirely voluntary to use and they will have the flexibility to fund their IATA EasyPay account through different payment methods, subject to local availability. For those Travel Agents required to provide a Financial Security, it will enable them to lower the amount of security provided. It will also give new Travel Agents access to the GoLite Accreditation Model. Furthermore, it will allow Travel Agents to continue selling if they reach their Remittance Holding Capacity. Access to new Accreditation Models IATA EasyPay is an enabler for the introduction of new Accreditation Models. Specifically, it allows for the introduction of the GoLite, a lighter option which will make the BSP more accessible. Reduced Financial Securities As a secure form of payment, IATA EasyPay transactions will not be part of a Travel Agent s cash sales at risk. This will offer an Agent a means to lower their Financial Security amounts with IATA. Voluntary IATA EasyPay payment method will be available to all IATA Accredited Travel Agents who will be able to use it on a voluntary basis. Payment alternatives IATA EasyPay is additional; it does not replace any of the existing payment methods. Funding alternatives available IATA EasyPay accounts may be funded through different alternatives. Bank transfers will be available in all BSPs, however, additional options like credit/debit card may be available in a BSP. Easy Easy to use and easy to reconcile. A unique IEP number per authorization (this could either be a single ticket or a booking, e.g. multiple tickets) provides Travel Agents with a simple process to reconcile tickets. Page 11 of 34

12 HOW DOES IATA EASYPAY WORK? The end-to-end process This section has been structured following the end to end process for IATA EasyPay sales. The process an IEP transaction follows and its different components is detailed in the following steps, from IEP account opening to Reporting: IEP ACCOUNT OPENING IEP ACCOUNT FUNDING IEP NUMBER GENERATION TICKET ISSUANCE SETTLEMENT REPORTING A Travel Agent opens an IEP account through the IEP Customer Portal. The Travel Agent funds its account from its financial source. Travel Agent requests an IEP number on its IEP account. Travel Agent will issue a ticket through the GDS using CC FOP by entering the IEP number. IATA transfers daily EasyPay amounts to each Airline. Funds expected to reach the Airlines within 48 to 96 hours following ticket issuance. IEP transactions will be highlighted on the periodic billing reports. The Travel Agent may consult its IEP daily activity on the IEP Customer Portal. A) IEP Account Opening A Travel Agent will open an IATA EasyPay account online through the IATA Customer Portal (please refer to Annex A or B IEP Portal Guide for further details on how to open an IEP account). Once the IEP account has been opened the Travel Agent user will be able to perform other actions such as fund the IEP account, add other users, withdraw funds, etc. B) IEP Account Funding A Travel Agent may fund its IEP account with different payment methods depending on the IATA EasyPay capabilities available in the BSP (bank transfer, credit/debit card or other forms of payments). Once the IEP account has been funded, the Travel Agent will be able to use those monies to issue a ticket corresponding to, at least, the value of the transaction or withdraw the remaining balance to its bank account. Please refer to Annex A or B - IEP Portal Guide for further details on how to add a bank account, fund an IEP account and withdraw funds. Page 12 of 34

13 C) IEP Number Generation Before ticket issuance, the Travel Agent will need to generate the IEP number to use in the GDS. Please note the following: IEP number will be based on a payment scheme network, e.g. Mastercard or UATP. IEP number will be dynamic number (single use). IEP number follows Primary Account Numbers (including Luhn check) structure as per ISO 7812 standard. IEP Authorization messaging structure follows ISO 8583 standard. Please refer to Annex A or B - IEP Portal Guide for further details on generating the IEP number. D) Ticket Issuance The Travel Agent will then be able to issue a ticket through any GDS by entering the IEP number, using and selecting the form of payment CC followed by the vendor code (CA or TP). At the time of issuance, the authorization request approval will secure the funds for payment of the transaction. If the Travel Agent has sufficient funds, funds are instantly blocked in the IEP account and the Travel Agent s available balance is reduced by the amount of the transaction, the authorization request is approved and the ticket can be issued (even when the ticket is for multiple bookings). On the other hand, if the Travel Agent does not have sufficient funds in the IEP account, the authorization request is denied and the ticket is not issued. For any tickets issued with IEP, no chargebacks are accepted. Example of ticket issuance process: IEP number obtained by the Travel Agent through the IEP account: and expire date 02/25. Travel Agent selects form of payment CC in the GDS. Depending on the BSP, the IEP numbers will be provided by Mastercard or UATP. In this specific example, Mastercard is the provider of the IEP number. o The Travel Agent will select CCCA FOP in the GDS. o Travel Agent inserts IEP number in the GDS booking system: CCCA o In case of an UATP number, CCTP would be used. Page 13 of 34

14 Please note the following: Authorizations messages coming outside the GDS environments will be rejected. Net Reporting Schemes can be used with IATA EasyPay: The amount corresponding to IEP is the one to be used for the Authorization. Multiple FOP scenarios including IEP are available: Issue, exchange or reissue (combination of IEP with other DISH forms of payment allowed). Void an IEP transaction: Tickets issued with IATA EasyPay as the form of payment can be voided within the same day as any other tickets. If the Travel Agent s GDS offers Reversed Authorization Messaging, then the authorization code securing a specific amount in the IATA EasyPay e-wallet will also be cancelled within the same day. Otherwise, the authorization code will expire within a set number of days. Please refer to Annex C Transactions Handbook for further details on void an IEP transaction. IEP Exchanges: Subject to all applicable ticketing / fare rules, tickets issued with IATA EasyPay as the form of payment can be exchanged or re-issued, the same as transactions issued with other forms of payment. Please refer to Annex C Transactions Handbook for further details on exchanging an IEP transaction (ticket). Refunds: Form of payment on the refund is the same as the one on the issue transaction. Therefore, tickets can be refunded on IATA EasyPay only if they have been issued, exchanged or reissued using IATA EasyPay as FOP. A refund can be submitted either by the Travel Agent through the GDS automated refund functionality or through the BSPlink Refund Application, as shown in Annex C Transactions Handbook. When processing a refund, the Travel Agent must use the same IEP number as on the original ticket. The refund will be processed and credited back to the Travel Agent s IEP account. If the wrong IEP number is entered, IATA s Data Processing Centre (DPC) will reject the transaction at the time of processing. Automated GDS refunds of IEP transactions will be credited to the Travel Agent s IEP account following the same processing cycles as IEP ticket sales. For Refund Applications processed via BSPlink, timelines will be subject to the carrier s authorization of the Refund Application. Page 14 of 34

15 In case an extra payment takes place due to an exchange ticket and the Travel Agent has paid an amount above the previous fixed price, the Travel Agent does not have to request the extra payment to be refunded, IATA will issue a credit note to deduct the extra amount from a future billing period. In case the Travel Agent does request the extra amount to be refunded, IATA will refund the money. Commissions: Any applicable commission will be transferred to (issues) or from (refunds) the Travel Agents as part of the standard Remittance & Settlement process. It should be noted that any applicable commission amounts due to the Travel Agent (for IEP sales) or from the Travel Agent (for IEP refunds) will be processed like commissions on BSP Card (CC) transactions, and netted from the Travel Agent s remittance amount. Fare and tax amounts: IATA EasyPay transaction totals are excluded from the Travel Agent s remittance amount due to the BSP, as funds are secured at the time of ticket issuance and transferred directly from the IEP system to the BSP (similar to CC transactions). Withdrawals: The Travel Agent is allowed to withdraw funds from its IEP account as long as the amount is not blocked for a ticket issuance. Please refer to Annex A or B IEP Portal Guide for further details on how to withdraw funds from the IEP account. E) Settlement IEP amounts are settled daily by IATA via the BSP to each Airline s bank account (like Cash settlements). Airlines can expect to receive IEP amounts within 48 to 96 hours following ticket issuance. F) Reporting IATA Data Processing Centre (DPC) receives the file containing all IEP transactions from the GDS, produces the periodic billing report where the IEP transactions are highlighted with the EP form of payment. Please refer to Annex D IEP Report Samples for further details. Page 15 of 34

16 Airlines participating to IATA EasyPay Airlines are automatically opted-in to accept IEP by default once IEP is available in any specific BSP, with the possibility to opt-out on a BSP per BSP basis. If an Airline has opted out from IEP, IATA Customer Service will send a one-off notification regarding that decision within the BSP that Airlines operates in. Also, upon request, IATA Customer Service Portal will be available to inform Travel Agents about Airlines payment methods. A Travel Agent is responsible to not issue tickets through an Airline that has opted-out. Currently the GDSs cannot restrict a Travel Agent to issue tickets on that Airline using IEP. Once the full implementation of IATA EasyPay is performed by the GDSs, IATA will be able to restrict opted-out Airlines on GDS level, preventing any unwanted tickets to be issued. Page 16 of 34

17 ADM/ACM ISSUANCE Airlines participating in IATA EasyPay can issue Agent Debit Memo (ADM)/Agent Credit Memo (ACM) for documents issued using IATA EasyPay transactions, just as they would for documents issued using any other form of payment. The ADM/ACM issued will be included in the Travel Agent s billing reports as a cash amount due and must be remitted by the Travel Agent to IATA through the BSP remittance process: In case of ADM, Travel Agents will remit the amount due in accordance with the BSP reporting calendar (independently from IATA EasyPay). In case of ACM and subsequent negative remittance, IATA will credit the amount to the Travel Agent s bank account (different from IATA EasyPay). Travel Agents under the new Accreditation Model GoLite: Will be providing their bank account details as part of their accreditation process. Will have access to BSPlink and would be obliged to check their periodical billing reports. Will be liable to remit corresponding amount owing for ADMs to the BSP in accordance with the applicable BSP remittance calendar. Failure to remit ADM amounts will be grounds to default the Travel Agent. Page 17 of 34

18 THE COST OF IATA EASYPAY For Travel Agents, there is no cost for using IATA EasyPay. Thus, opening and maintaining an IEP account is free of charge, and having it will allow Travel Agents to have another payment method available to issue tickets when they reach the RHC, when they are accredited under GoLite Model or on a voluntary basis. Airlines will bear the cost of IEP as they currently pay the cost of BSP CA and BSP CC sales. Please note that Airlines will hold themselves responsible for managing their business models that fit best their individual commercial strategy, therefore they are entitled to decide whether bear that cost, transfer it to Travel Agents or give incentives for Travel Agents to use. IATA is in no position to interfere in Airlines business decisions. This commercial policy needs to be decided individually by the carrier BSP by BSP before starting the process of implementing IEP. Page 18 of 34

19 IATA EASYPAY LINK TO THE OTHER NEWGEN ISS PILLARS Accreditation Models In order to bring Travel Agents greater choice and flexibility and address their today s different concerns and risks, NewGen ISS is introducing a range of Accreditation Models. By moving away from the current one-size-fits-all approach, the New Accreditation Models can better fit Travel Agent needs, while enabling a smarter, targeted risk management. Travel Agents will be able to choose from the following three models of accreditation as well as to convert across models as their businesses evolve. GoLite: It is an entry-level accreditation to facilitate participation in the BSP. Many Travel Agents today, especially in emerging markets, cannot become accredited due to the financial requirements and underlying costs associated to accreditation, e.g. Financial Securities. Airlines that wish to do business with these Travel Agents must do so outside the BSP. Under this new Accreditation model, Travel Agents are only able to issue transactions in the BSP using IATA EasyPay or the customer s debit / credit card as the forms of payment. Since Travel Agents do not have access to BSP Cash as a form of payment, there is limited financial risk. Accordingly, the applicable financial requirements are minimal. However, chargeback insurance or alternative security is required to cover risk associated to credit card sales. The benefit of this Accreditation Model is that it lowers the barriers to entry for Travel Agents while minimizing the financial risk for Airlines. Travel Agents will have greater flexibility to operate in the BSP while Airlines will have the ability to distribute via a wider network of Travel Agents, if they so choose. GoStandard: It is based on the current Accreditation Model, with a new risk management process to mitigate default losses and promote safer selling. Local financial criteria and local remittance calendars continues to apply. The key change is the introduction of a maximum threshold for outstanding cash sales held in trust by the Travel Agent pending remittance to the BSP (the so-called Remittance Holding Capacity). The Remittance Holding Capacity is established for all Travel Agents with access to cash as a form of payment. As a new feature, Travel Agents under this Model have access to IATA EasyPay to use on an optional and voluntary basis. Since this Accreditation Model allows access to cash sales, an on-going assessment of Travel Agents credit history will be performed as well as a financial review on an annual basis. Travel Agents will be required to provide a financial security based on their credit status or local Page 19 of 34

20 financial criteria. It is expected that the majority of Travel Agents accredited today will remain under this Accreditation Model. GoGlobal: It is a one-stop-shop accreditation for Travel Agents with operations in multiple BSPs. Multi-Country Travel Agents meet a single global set of requirements and criteria (including compliance with local regulation), established in Resolution, and are able to accredit all their locations worldwide under a single Passenger Sales Agency Agreement. Any location of the Multi-Country group sharing more than 50% common ownership is required to fall under the GoGlobal. Risk management takes place at the parent-level, with the parent undertaking legal and financial responsibility for all its locations worldwide. Accordingly, the parent is assessed quarterly under a multi-dimensional assessment framework, and if necessary, the parent may be required to provide a financial security covering the sales at risk of the entire group. GoGlobal Travel Agents are also subject to an aggregated Remittance Holding Capacity for the entire group (BSP remittances nonetheless remains per local calendars). For multinational Travel Agents, this new model offers greater efficiencies and simplified processes. For Airlines, GoGlobal Accreditation Model allows for greater visibility of the group s sales activities across BPSs and for a more robust risk management of the entire entity. Travel Agents accredited today will be transitioned to GoStandard. However, Travel Agents may voluntarily convert across models if and once they meet the applicable requirements. Applying for a conversion in Accreditation Model (GoLite to GoStandard or GoStandard to GoLite) will be available via IATA Customer Service Portal (also known as Notice of Change) once the Accreditation Models are Live circa March In turn, GoGlobal conversions (GoGlobal to GoStandard 2 or GoStandard to GoGlobal) will not be available until late The form is part of 812 Resolution and has been reproduced as an online form for ease of access on IATA Customer Service Portal. Note, if a Travel Agent has converted to GoLite and then some time later moves back to GoStandard, the Travel Agent will have the risk event of Authorization to use Cash payment method for less than 24 months which will stay in their Risk History for 24 months. Also, Travel Agents will be notified of their Remittance Holding Capacity and applicable Risk Status. 2 Conversions between GoGlobal to GoStandard will entail a new Passenger Sales Agency Agreement (PSAA). Page 20 of 34

21 Remittance Holding Capacity (RHC) In today s online environment, thousands of tickets can be issued in a matter of hours. This is regardless of the Travel Agent s past sales, risk status or ability to remit the respective amounts due, creating significant exposure for the Airlines as evidenced by past defaults and intentional bust-outs. Bust-outs have not only resulted in significant, multi-million dollar losses for carriers; they have also undermined bona fide Travel Agents and the overall integrity of the system. To address this risk, IATA has proposed the Remittance Holding Capacity (RHC). The RHC is the maximum amount of Airlines monies held in trust that a Travel Agent may have outstanding at any time to be remitted to the BSP for Cash sales 3. Funds received from customers for these transactions are held in trust by the Travel Agent on behalf of the Airlines until remittance to the BSP. For Travel Agents with access to a Cash facility under the GoStandard and GoGlobal Accreditation Models, one of three Risk Statuses will be assigned (A, B or C). This Risk Status will be determined by the Travel Agents ongoing risk history (historical behavior in the BSP) and the outcome of their financial reviews. For GoGlobal Travel Agents, the financial review will be quarterly, in accordance with the multicountry assessment framework. For GoStandard Travel Agents, the financial review will be annual in accordance with the applicable local financial criteria of the Travel Agent. Each Risk Status will carry different conditions related to financial security requirements, applicable remittance frequency and the calculation of a Travel Agent s Remittance Holding Capacity. How is the Risk Status assigned? One of three statuses will be assigned per the following table: Financial Review Result Risk History Assessment Risk Status Assigned Pass Pass A Pass Fail B Fail Pass B Fail Fail C 3 The RHC applies to Travel Agents with access to Cash sales (transactions) only, and does not apply for CC sales. Page 21 of 34

22 What are the Cash conditions associated to each Risk Status? Depending on a Travel Agent s Risk Status, different Cash conditions will apply as shown below: Risk Status Assigned A Cash Conditions 1. RHC = Calculation (formula shown below) 2. Financial Security only if required per LFC for Standard Travel Agents with Cash facility 3. Standard Remittance frequency of the BSP B 1. RHC = Calculation (formula shown below) 2. Financial Security required 3. Standard Remittance frequency of the BSP C 1. RHC = Financial Security provided 2. Financial Security required 3. Most frequent remittance frequency in the BSP* *Applicable for BSPs with multiple remittance frequencies. In addition to the assignment of a Risk Status, all GoStandard and GoGlobal Travel Agents will be granted an individual RHC. As described, the RHC is the maximum amount of monies at risk that a Travel Agent may have outstanding to the BSP at any time. IATA will continuously monitor, in real-time, Travel Agents sales and if ever a Travel Agent reaches the RHC granted, Cash as a form of payment will be restricted. The Travel Agent will nonetheless be able to continue transacting using other available payment methods. Once a remittance is received and the Travel Agent s outstanding amounts fall below the RHC threshold, Cash as a form of payment will be restored. How is the RHC calculated? The RHC formula These measures are intended to provide Travel Agents with the necessary tools to manage their RHC. Page 22 of 34

23 Risk Status Assigned Remittance Holding Capacity Calculation A Total Days X Daily Average BSP Cash Turnover (3 Highest Reporting periods) + 100% B Total Days X Daily Average BSP Cash Turnover (3 Highest Reporting periods) + 100% C Remittance Holding Capacity = Financial Security Amount Provided Under this calculation: Total Days = Number of days in Reporting period plus number of days in Remittance period. Daily Average BSP Cash Turnover = Travel Agent s Average daily BSP cash turnover for the 3 highest Reporting periods of the previous 12 months. 100% = the +100% growth threshold allows room for exceptional situations. However, if the Travel Agent is aware of a large group or special event upcoming, the Travel Agent can remit customer funds owing in advance of remittance date to increase the Cash facility available and/or use IATA EasyPay or the customer s debit/credit card to issue the related transactions. The Travel Agent can also provide additional security to raise its RHC. Travel Agents will also be able to adjust their RHC by amending the amount of Financial Security provided to IATA. One type of Financial Security option available to Travel Agents is Global Default Insurance or GDI (see next section), which can be easily adjusted to facilitate changes in a Travel Agent s RHC. As GoLite Travel Agents do not have access to a Cash facility within the BSP, no Risk Status or RHC is applicable. No minimum Financial Security is required for GoLite-Accredited Travel Agents opting to use only IATA EasyPay. To address the potential risk related to Credit Card transactions, a minimum financial security in the equivalent of 5,000 USD is required for GoLite Travel Agents who wish to have access to the customer card payment method. GoLite Travel Agents ADM levels in the BSP will also be monitored and additional security may be requested if ADM levels exceed a defined threshold. Page 23 of 34

24 Remittance Holding Capacity notification to Travel Agents Before going Live, IATA will notify the Travel Agent about their RHC and Risk Status (plus Cash conditions) via . In turn, the Travel Agent should consider the following guidance to ensure its readiness for the RHC: Ideally, assure that the Portal User is in place to receive notifications. As an optional (transfer method) alternative, set up an IEP account prior to go-live so that the Travel Agent can use this form of payment if they reach their RHC. Assess if they want to increase their overall RHC. Once the Accreditation Models and RHC are fully Live, Travel Agents (users with Portal Administrator role) will be notified - that includes an and a pop-up once they sign into the portal. The Travel Agency that will receive this portal notification will be assigned a dedicated RHC portal service that they can further assign to other colleagues. By doing so, Travel Agents will see on the IATA Customer Service Portal the RHC amount, the consumed level since the last update from the Risk Monitoring Engine (RME) and they will also have a button that will allow them to check in real time this value (to monitor their RHC usage directly through the IATA Customer Portal). Updates from RME are sent only upon 50%, 75%, 100% thresholds. Any changes in their RHC amount will be communicated as part of an existing process (additional Financial Security, RHC annual recalculation, etc.). In case the RHC amount changes, the percentage of the consumed RHC is also recalculated and communicated in the same notification. A Travel Agent s RHC will be reviewed at minimum once per year and will be reassessed with any change to a Travel Agent s Risk Status or applicable Cash conditions. Travel Agents may also request an ad hoc recalculation of their RHC considering sales from the previous 12 months. In case the RHC threshold is reached, Travel Agents will: Have the ability to continue issuing tickets using IATA EasyPay. Have the ability to continue issuing tickets using customer cards. Be able to make full or partial advanced remittances to the BSP to lower their amount outstanding. Page 24 of 34

25 Global Default Insurance (GDI) GDI is an additional financial security type available to Travel Agents along with those financial security types currently acceptable under Resolution 850p, therefore it does not replace any of the current financial security types included in this resolution. This new financial security type consists of a standardized global default insurance policy brokered to Euler Hermes, a global credit insurance company and subsidiary of the Allianz Group. Travel Agents may list themselves on a voluntary basis under the policy for a defined amount of cover. The amount of cover obtained consists of an individual limit and corresponds to the amount of financial security being provided to IATA. Thus, a Travel Agent interested in GDI will apply directly to Euler Hermes for a cover amount (or limit) under the GDI policy corresponding to the amount of financial security to be provided to IATA. Euler Hermes will assess the Agent s request, then advise if the Travel Agent is eligible and quote the applicable fees. If the Agent agrees with the conditions and decides to proceed with GDI, Euler Hermes will confirm the cover and notify IATA. In turn, IATA will invoice and collect from the Agent the fee amounts due. Pricing for GDI is fees are determined by Euler Hermes, not IATA, and will be quoted directly by the insurer to the Travel Agent. A Travel Agent can request a quote on the insurance portal free of charge to compare with other acceptable forms of security. The GDI does not require the Agent to pledge any form of collateral. Insured amount can be amended within 2-3 working days and quotes may be requested directly via Euler Hermes online portal. Under the GDI, the cost of the insurance (fee) and other administrative costs will be collected from the Travel Agents by IATA on a cost recovery basis as IATA is the policyholder, beneficiary and named insured, and has to comply with the obligations of the policy, in particular paying the insurance. Page 25 of 34

26 TRAVEL AGENT READINESS STRATEGIC CONSIDERATIONS FOR TRAVEL AGENTS Strategy The key opportunities NewGen ISS may bring to Travel Agents are as follows: BSP Accreditation. NewGen ISS approaches the air industry going from one Accreditation to three Accreditation Models. This new approach will imply: Travel Agents will have more options for Accreditation which will offer better suitability for their different business needs: o GoLite is an option for Travel Agents that do not want to provide Financial Securities and can work on a pay-as-you-go basis. o GoStandard is an option for Travel Agents that want to continue as they do today, with possibility to reduce current Financial Securities in case they have one. o GoGlobal is an option for Travel Agents working in multiple BSPs and that want a streamlined and one point of Accreditation covering all locations. A simplified entry to the BSP: IEP facilitates the implementation of Travel Agents Accreditation Models and is specifically important for Travel Agents under GoLite as those Travel Agents will not have access to Cash. A possibility for current Travel Agents to reduce or remove their Financial Security amounts, if those Travel Agents user other form of payment than Cash. A Travel Agent may need to consider: To inform themselves about the different Accreditation Models and requirements and apply for the Model best suitable for their business. Options to reduce or remove Financial Securities. For Travel Agents finding Financial Securities burdensome and expensive, there are other options to manage their business: Travel Agents may change their Accreditation Model (a transition). Travel Agents may use IATA EasyPay. GDI as a viable security option for Travel Agents: Option to current Financial Securities that does not require collateral or application fees. Provides competition to current Financial Security options. Page 26 of 34

27 A Travel Agent may need to consider: To compare GDI with their current terms and conditions and decide on what option is best for their business. To inform themselves about the different Accreditation Models and requirements and apply for the Model best suitable for their business. To use IATA EasyPay to reduce Financial Security amount requirements. Page 27 of 34

28 ANNEXES ANNEX A IEP PORTAL GUIDE Depending on the country, a specific vendor is used to provide the IEP portal. See separate document (.pdf): IEP Portal Guide. Applicable to the following BSPs: Belize Benin Bermuda Burkina Faso Cameroon Chad Congo (Republic of) Cote d'ivoire Denmark El Salvador Finland Gabon Hungary Iceland Mali Mauritania Mexico Nicaragua Niger Norway Senegal Singapore Sweden Togo Page 28 of 34

29 ANNEX B IEP PORTAL GUIDE Depending on the country, a specific vendor is used to provide the IEP portal. See separate document (.pdf): IEP Portal Guide. Applicable to the following BSPs: Bahrain Canada Chinese Taipei Costa Rica Egypt Guatemala Honduras Lebanon Oman Panama Qatar Saudi Arabia United Arab Emirates Page 29 of 34

30 ANNEX C IEP TRANSACTIONS HANDBOOK See separate document (.pdf): IEP Transactions Handbook. Page 30 of 34

31 ANNEX D - IATA EASYPAY REPORT SAMPLES Periodical billing reports Sample 1 Agent Billing Details Page 31 of 34

32 Page 32 of 34

33 Sample 2 Agent Billing Summary Page 33 of 34

34 BSPlink IEP Online Billing Reports See separate document (.pdf): Page 34 of 34