Aviation: Transparency in Payments Implemented in Finland, Norway and Sweden

IATA has announced that Transparency in Payments (TIP) has been implemented in the Finland, Norway and Sweden markets.

TIP, which is being introduced in conjunction with NewGen ISS, is an industry initiative focused on providing airlines with increased transparency and control in the collection of their sales generated in the travel agency channel. At the same time, it will enable travel agents to take advantage of new forms of payment for the remittance of customer funds.

"The current landscape for payment services has changed dramatically, and new players and payment solutions are emerging, offering travel agents greater options to remit customer funds to airlines. However, up until now, airlines have lacked visibility into these newer payment methods. TIP will address this issue, creating new opportunities for airlines and travel agents," said Aleks Popovich, IATA’s Senior Vice President, Financial and Distribution Services.

No form of remittance is barred by TIP, but travel agents can only use those forms to which an airline has previously given consent. Importantly, if an airline consents, TIP explicitly allows travel agents to use their own credit cards. IATA has worked closely with key industry stakeholders to develop TIP to ensure it provides:

- Increased transparency and control for each player;

- An efficient framework and tools to enable agents and airlines to bilaterally agree on usage of Alternative Transfer Methods, such as agent’s own credit cards and agent’s virtual account numbers (VANs), for the direct remittance to airlines of agency Billing and Settlement Plan (BSP) sales; and

- A resolution framework which is better adapted to regulatory and market conditions.

Under TIP, providers of Alternative Transfer Methods wishing to participate in agency direct remittances to airlines of BSP sales will enlist with IATA, and provide relevant information about their payment products. Agents and airlines will have access to this information on a need-to-know basis.

"We look forward to working with providers of Alternative Transfer Methods such as AirPlus International and Edenred Corporate Payment, who support the principles underlying TIP. We anticipate that other providers will commit to enrolling their products within the TIP framework once their technical environment is ready, to contribute to greater transparency in the airline and agency ecosystem," said Popovich.

Over the coming weeks, TIP will be implemented in Iceland and Denmark (9 May), Canada (16 May), and Singapore (23 May), with rollout expected to be completed in all BSP markets by Q1 2020.

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