IATA, Deutsche Bank to launch electronic real-time payment system

The new system for web-based ticket sales to individual passengers is scheduled to be launched in Europe at the begining of 2018, with Germany as the first market, according to Financial Times.

The International Air Transport Association (IATA) estimates that the global airline industry’s payment processing costs add up to USD 8 billion a year, with credit card companies such as Visa and Mastercard usually charging between 1 and 3% in fees, the online publication continues.

The system developed by IATA and Deutsche Bank will charge a fixed fee and it will be made possible by a new EU’s payments regulation PSD2 that is forcing banks to give third parties access to customer data and initiate payments.

Customers using the new payments scheme would enter their bank account data and Deutsche Bank would then check in real time if the passenger has sufficient funds, collect the fares and transfer the money to the airline.