AFTA view: Nov 2017
Jayson Westbury, chief executive AFTA
Hope for NewGenISS
By the time this November Issue of travelBulletin is in your hands and you might be reading this, the New Generation of IATA Settlement Systems (NewGenISS) may well have passed the Passenger Agency Conference no.40 (PAConf/40) in Geneva Switzerland. While most people in the industry these days will yawn, if passed it is a step in the right direction and potentially a game changer for the relationship between travel agents and airlines.
NewGenISS has been on the agenda for the past three or more years. Over this time the number of working groups, meetings, discussions, arguments, disagreements, agreements and generally talks have been immense. A change of this magnitude deserves serious consideration and as a person who has been in a front row seat during the entire process I can confirm plenty of serious consideration has been given to this change by the global travel agency community.
However, NewGenISS does bring hope and opportunity for the way agents may be able to settle with airlines, provided airlines have an open mind and think in a modern way to how best to ensure both the travel agent and airline cash flow is considered.
NewGenISS has four basic pillars as the cornerstone of the reform. First, the introduction of three IATA accreditation levels which includes an option for travel agents to settle with airlines directly (such as with a customers credit card) that does not see the airline extending any credit. The other two options include the current standard form of accreditation (what IATA agents have now) and multi-country accreditation for large multi-national agencies.
Second, the introduction of a new IATA Global Default insurance product for those IATA agents that need to provide a bond via insurance. This new product will compete with the existing insurance and bank guarantees on offer.
Third, the introduction of a credit limit on existing IATA agents, known as Remittance Holding Capacity which will cap the amount of credit offered to an agent in a billing cycle and restrict the agent’s ability to settle to cash. This will require them to use another form of settlement (card or the like) or pre-settle the cash balance owed in some form earlier than the settlement cycle — in the Australian BSP this will be 7 days from February 2018.
Fourth, the opening up of the BSP to alternative forms of payment known as Transparency in Payments. This will mean that agents, by agreement with a specific airline, may be able to use a credit card in the name of the agent or some other payment form. It also allows more modern forms of payments by customers to be passed through the BSP in the future.
The fourth point in the reform requires a change to resolution 890, known by IATA agents to be the blocker of all blockers. Resolution 890 prevents the use of a credit card issued in the name of the agent. If passed by PAConf/40 it will be modified to allow the bilateral agreement between an agent and an airline to use this type of payment.
Time will tell of course if this will all happen and if airlines can see how this will be good for them. I hope that as the NewGenISS is implemented and the agency and airline community think about the mutual benefits that come from a modern approach to payments.
Agents have been paying other suppliers in a more modern way for years, it is just that it takes time for the IATA machine to catch up. I believe that NewGenISS may deliver that future-proof catch up that is needed in order for the BSP to remain relevant.
We will all have to wait and see what happens this month in Geneva when the airlines cast their votes for how modern they really want the BSP to be going forward. Fingers crossed, they all vote yes.