Ai Editorial: NDC brings a new flow to the industry and one critical aspect is related to being the Merchant of Record. So how the responsibility related to a transaction is going to shape up must be delved into, writes Ai’s Ritesh Gupta
19th July, 2021
Airlines and travel intermediaries have to re-consider processes and payment workflows with the adoption of IATA’s standard, NDC.
“Airlines shouldn’t take payments for granted. It has to be inclusive in the NDC offering,” mentioned Mirza Adnan Beig, Head of Product Strategy – Payments at Amadeus during Ai’s webinar last month. He recommended that airlines must look at single gateway connection, one link for payment services including acceptance, capture, fraud management and reporting, and replicate their back office set up for NDC.
Responsibility related to a transaction
Other than working on the requisite set up, another aspect that is being discussed is related to accepting responsibility for processing the payment.
Airlines control the offer via the NDC standard and in case they also intend to be the Merchant of Record for transactions coming via the indirect channel, then what all to consider must be delved into.
For instance, it is imperative to understand fraud in the NDC flow. From fraud management perspective, there is going to be a liability shift. Referring to the same, Stuart Barwood, Director Global Airline Strategy at Forter, said “Lot of work is required for this (liability shift).” Referring to utility of 3D Secure in handling the issue with the issuer coming in the picture, he said the impact on the conversion rate can’t be ignored.
Some other vital aspects:
- What happens when an airline receives a transaction request from a 3rd party?
- The issue of data security
- Also, what if a carrier decides not to be the Merchant of Record? How acceptance costs shape up?
Data Security and Tokenization
Explaining the utility of tokenization, which replaces sensitive data with random characters to shield the original data, Martina said the same reduces risk and there are various layers of data protection via a flexible framework. Valentin explained the 3D/ SCA best practices for NDC use cases by referring to the entire booking flow featuring the customer, seller like an OTA, NDC aggregator, airline and the payment gateway (the role of 3D data and authorization) and involving tokenization and de-tokenization.
Valentin explained that the seller only passes payment information and does not finalize the transaction. It works considering that the airline needs 3D information and the seller wants the reservation to go through.
Overall, the webinar indicated that airlines can avail options to prepare for NDC payment-related aspects in an earnest manner.
Ai’s upcoming events: https://www.aiconnects.us/events/upcoming-events/