The International Air Transport Association (IATA) has rolled out a new payment model for travel agents which aims to ease cash flows for airlines.
Currently, travel agents in India receive seven-day credit to pay airlines for ticket bookings under the IATA's billing and settlement plan. Agents are required to furnish a bank guarantee to avail credit.
Under the EasyPay scheme announced today, agents will be able to make payments using a debit card. IATA has tied up with Yes Bank to implement the scheme.
The EasyPay is a component of the new generation settlement system (NewGen ISS) launched by IATA which represents over 250 airlines around the world.
EasyPay is a voluntary payment model and agents can continue to avail seven-day credit under the existing process. However, agents may have to furnish a bank guarantee of a higher amount to avail credit as IATA has reworked some of its policies governing the agents' accreditation.
“Digitisation of payments will increase cash flows into the airline industry for both airlines and IATA agents in India with fund realisation turn-around improvement by almost 9-10 days. With this partnership, Yes Bank is targeting an annual throughput of Rs 200 billion in due course,” Yes Bank said in a press release.
An industry expert, however, said that scheme could remain a non-starter unless agents are offered better deals and discounts by airlines while selling tickets under EasyPay scheme. “We expect that for some time, both models ie. Bank guarantee & Easypay will co-exist with EasyPay ensuring business continuity for agents especially taking care of seasonal growth. Asides the comprehensive suite of banking solutions provided by YES Bank, it is also anticipated that airlines will also closely work with the agents to make this model successful,” said Ajay Rajan, said global head sales,( Transaction Banking Group) at Yes Bank.
“NewGen ISS is a modernisation of billing and settlement plan and brings faster, safer and more cost effective and relevant financial settlement services and solutions to airlines and travel agents. It is already live in 21 countries and we look forward to having India as a part of the NewGen ISS countries from October,” said Yeoh Hoy Chin, IATA's regional director, financial and distribution services (Asia-Pacific).Back to news articles