New Gen ISS

The NewGeneration of IATA Settlement Systems (NewGen ISS) aims at transforming the current ISS business model which facilitates the distribution and settlement of funds in between travel agents and airlines.

NewGen ISS will deli ver industry-wide solutions to serve the needs of airlines and travel agents in the following areas of focus: Agency Accreditation Models; Risk Management; Global Insurance; and IATA EasyPay.

The Three Pillars of NewGen ISS are:

  • A range of travel agent accreditation models that can better fit travel agent needs;
  • IATA EasyPay – a voluntary pay-as-you-go e-wallet payment solution for issuance of airline tickets in the BSP, and
  • Global Default Insurance – an optional financial security alternative to bank guarantees for travel agents.

Accreditation Models

NewGen ISS is proposing to move from the current one-size fits all accreditation and to offer greater flexibility through the introduction of three models of accreditation. Agents will be able to choose the model most applicable to their business, as well as to convert across models as their business evolves.

The proposed models are as follows:

  • Multi-Country Accreditation: a “one-stop-shop” accreditation for agents with operations in multiple BSPs. Multi-Country agents will meet a single global set of requirements and criteria, established in Resolution, and will be able to accredit all their locations worldwide under a single Passenger Sales Agency Agreement.
  • Standard Accreditation: This model corresponds most closely to the current accreditation, and is for agents operating in a single country. In addition to the accreditation requirements established in Resolution, agents under this model will be subject to those requirements established in the Local Financial Criteria of the BSPs in which they operate, including annual financial reviews. These agents will have access to all the BSP forms of payment, cash, credit card and IATA EasyPay.
  • Standard Accreditation with No Cash Facility: For agents that do not require a cash facility in the BSP, i.e. access to cash sales, this model will offer an easier accreditation process as there will be limited financial risk.

IATA EasyPay

NewGen ISS is introducing IATA EasyPay, a new “pay as you go” payment method for agents to issue tickets via the BSP. IATA EasyPay is a closed-loop and proprietary payment system with the following characteristics:

  • Voluntary – This new payment method will be available to all agents, but it will be up to each agent to decide whether or not to use it.  It will not replace existing payment methods.
  • Secure – To use IATA EasyPay, agents will fund their EasyPay account.  At the time of ticket issuance, the IATA EasyPay system will first verify that funds are available in the account.  If yes, the system will generate an authorization and the related funds will be blocked. Payment is final upon authorisation, and for airlines there is no risk of chargebacks. Agents will nonetheless be able to void and refund their IATA Easypay transactions as per usual through the BSP.
  • Fast – IATA will settle the IATA EasyPay monies to the airlines using the existing BSP processes, with monies expected to reach the airlines within 48 to 72 hours following ticket issuance.
  • Economical – With a low cost per transaction, IATA EasyPay will be more cost effective for airlines than credit card transactions.
  • Flexible – As a secure form of payment, EasyPay transactions will not be part of an Agent’s cash sales at risk. This will offer Agents a means to lower their financial security amounts with IATA, and to issue transactions which are not included in their cash issuance capacity. 

IATA EasyPay is a key component of NewGen ISS, as it will enable the introduction of new accreditation models and the new risk management framework.

The Payment Method Technical Advisory Group, all focus is on the development of a standard to allow for third-party electronic payment solutions to be implemented alongside EasyPay solution.

Global Default Insurance

IATA is working to introduce a new type of financial security in the form of Global Default Insurance. The Insurance will be optional and in addition to those financial securities currently acceptable under IATA Resolution 850p. It is not intended to replace or exclude other security types, including local default insurance programs (DIPs).

IATA will establish the framework for brokers and global credit insurers to introduce this additional financial security type, but IATA will not be the one providing insurance.  

Agents will have the choice whether to join the global insurance policy if required to provide a financial security. The objective is that for agents, Global Insurance will present a cost-effective and flexible alternative to bank guarantees and other types of security. Under the new risk management framework, it will also allow agents to amend their insured amount in a relatively quick time frame and consequently raise their capacity for cash sales.

For airlines, the objective is for the insurance solution to provide strong and reliable coverage that increases the certainty of claims in the event of a default.

Click here for more information about NewGen ISS.