The recent partnership between the International Air Transport Association (IATA) and Outpayce marks a pivotal moment for the airline industry, particularly in terms of payment processing. This collaboration aims to empower airlines to accept account-to-account payments on a global scale, providing a more streamlined, cost-effective, and secure transaction method for customers.
Outpayce is a player in the travel payments sector, managing an impressive USD $160 billion in travel payments each year. The introduction of IATA Pay is designed to optimize the payment journey for travelers, allowing them to directly debit their bank accounts when purchasing air tickets online. This initiative is not just about innovation; it’s also about drastically reducing costs associated with traditional payment processing methods.
How IATA Pay Works
IATA Pay utilizes several established payment regulations and systems from various countries, including the Unified Payments Interface (UPI) in India, iDeal in the Netherlands, PIX in Brazil, and QR Ph in the Philippines. Currently, the service is available in over 30 countries, with plans for further expansion. The process is straightforward: at checkout on an airline’s website, travelers can select their bank or scan a QR code associated with their country. The payment is then processed by IATA, transferring funds directly from the customer’s account, with the airline receiving settlement the very next day.
A Shift Towards Account-to-Account Payments
Juan Antonio Rodriguez, Director of Financial Settlement Operations at IATA, emphasized the growing momentum behind account-to-account payments. This shift comes in response to both consumer demand for seamless payment experiences and the desire among airlines to minimize payment processing costs. “The trend towards account-to-account payments is gaining more momentum. It provides a seamless experience for passengers and offers an attractive option for airlines to lower the cost of payment acceptance,” Rodriguez remarked.
Philippine Airlines has already made significant strides by becoming the first airline to adopt IATA Pay through Outpayce’s Xchange Payments Platform (XPP). Anna Isabel Bengzon, CFO of Philippine Airlines, hailed the introduction of IATA Pay as a major enhancement to the customer experience. “We are pleased to now accept IATA Pay in the Philippines. It will provide our passengers with a more convenient and secure way of paying via QR code using their digital wallets or through their bank accounts,” she explained.
The Benefits of IATA Pay
The advantages of implementing IATA Pay extend beyond just payment convenience.
1. Cost Reduction: Traditional credit card processing comes with high fees and operational expenses. IATA Pay offers airlines a chance to significantly cut these costs, making each transaction more profitable.
2. Increased Security: Account-to-account payments typically carry less risk of fraud compared to card payments, which further secures the payment process for both airlines and customers.
3. Enhanced Customer Experience: With the ability to pay directly from bank accounts or through widely adopted digital wallets, customers can enjoy a more seamless and efficient transaction process.
4. Analytics and Reporting: Airlines utilizing the XPP will gain access to robust analytics tools that track the performance of various payment flows. This insight is essential for optimizing operations and customer satisfaction.
Future Implications for the Airline Industry
Jean-Christophe Lacour, SVP and Head of Product Management & Delivery at Outpayce, pointed to the company’s commitment to broadening payment options for airline partners. Plans are underway to introduce self-service APIs, facilitating even easier connections to XPP. This is expected to expand payment choices significantly, further enhancing the payment orchestration experience for travel companies.
The pilot program for self-service APIs signals a shift toward more accessible integration for airlines, allowing them the flexibility to select various payment methods based on their operational geography and customer preferences. This approach not only streamlines transactions but also optimizes the overall customer experience.
Conclusion
As IATA and Outpayce collaborate to reshape the way airlines accept payments, there is potential for a substantial transformation in the travel sector. The introduction of IATA Pay offers airlines an innovative and secure payment method that not only reduces costs but also enhances customer satisfaction. As other airlines observe the success of this payment solution, we may see a broader industry shift towards account-to-account transactions.
With growing consumer expectations for faster, safer, and more efficient payment processes, the partnership between IATA and Outpayce may very well set a new standard in airline payments.
