NDC - payment processing, fraud, liability…loads to look into! - AiConnects.us
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NDC – payment processing, fraud, liability…loads to look into!

Ai Editorial

29th September, 2021

The NDC retailing flow is being assessed and one of the vital aspects is related to payment processing.

Another crucial aspect is following appropriate payment protocols in NDC to ensure compliance, reduction in fraud and also evaluating liability shift from airlines’ and agents’ perspective.

IATA’s response

During the recently held “NDC – Retrofitting Payments” webinar, Thibaut Ruy, Head of Settlement with Orders Program, IATA, answered several questions about the dealing between the ORA (Offer Responsible Airline) and POA (Participating Offer Airline), for instance, when the latter comes up with an offer for a connecting flight when requested by ORA and finally the ORA works out an offer as per the shopping request; BSP cash collection process, liability shift etc.

Ruy shared that NDC does not alter the BSP cash collection process in any manner. “Once reported by the airline to BSP, the transaction will be remitted by the travel agent to BSP as per the usual procedures and frequency which apply to all BSP cash sales,” he said, adding that this applies both to RET reported NDC transactions and to transactions performed with Settlement with Order API.

As for ORA and POA, Ruy said such “sales are paid using regular interlining clearing and settlement procedures, using interline ticketing rails”.

What about payment protocols for reducing fraud and Passenger Agency Conference Resolutions?

On the issue of liability shift, Ruy referred to the Passenger Agency Conference Resolution 890x and said it specifies the liability between airline and a seller who is also an IATA accredited agent. “It does not guarantee that liability shift, as it is always incumbent to the airline to apply its right to raise and collect ADMs,” he said.   

There are more areas, too, that need to be evaluated. Which party is responsible for the authorization and billing for credit, debit and related forms of payment? Debit memos and cost savings? How the responsibility of airline that chooses to be the Merchant of Record shapes up is what important stakeholders are looking into. What are authentication options in the NDC APIs?

Established carriers have worked out and are constantly looking at authentication options in the NDC APIs, fraud and also to be compliant with important requirements, such as the European Payment Services Directive (PSD2). NDC bring along with it critical financial changes and airlines need to work with their payment processing and technology partners to come to grip with the situation.

By Ritesh Gupta

Ai Team

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