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IATA demonstrates new payment method for air tickets

Wednesday 9 January 2019 00:35 CET | News

The International Air Transport Association (IATA) has announced the completion of the first IATA Pay ticket purchase transaction in a live test environment.

IATA Pay is an industry-supported initiative to develop a new payment option for consumers when purchasing a ticket directly from an airline website. It is made possible by the European Commission’s second Payment Services Directive (PSD2), and the UK’s Open Banking regulation. These regulations encourage the use of so-called direct debit transactions in which payments are made from the customer’s bank account directly into the bank account of the merchant. This method offers a high level of security to both the user and the recipient and it can be instantaneous.

Moreover, the live test was conducted with ipagoo, a UK-based fintech company, and it was done under the UK’s Open Banking framework with IATA Pay pilot airlines, including Cathay Pacific Airways, Scandinavian Airlines, and Emirates.

Some of the advantages of IATA Pay for airlines are a cheap payment option, security, a cash flow with instant or near instant payment to the merchant, streamlined payment process resulting in fewer lost sales. For consumers, the benefits include access to a new, secure payment method.

In addition, IATA is working with Deutsche Bank on a prototype for Europe (excluding the UK), starting with the German market, which is expected to undergo testing in early 2019. Following this, IATA will validate the concept with the intention to expand to other regions.


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Keywords: The International Air Transport Association, IATA, IATA Pay, ipagoo, payment option, the European Commission, PSD2, Open Banking, merchant, payment method
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Countries: World