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NewGen ISS

The New Generation of IATA Settlement Systems (NewGen ISS) aims at transforming the current ISS business model which facilitates the distribution and settlement of funds in between travel agents and airlines.

New Gen ISS will deliver industry-wide solutions to better serve the needs of airlines and travel agents in the following areas of focus: Agency Accreditation Models; Risk Management; Global Insurance; and IATA EasyPay.

Accreditation Risk Mgmt Global insurance EasyPay Governance Info

Accredited travel agents in a BSP (Billing and Settlement Plan) benefit from selling international tickets to a given market on behalf of the participating airlines and access to a single standard interface for invoicing and payment to carriers. However the main rules of the BSP were established decades ago, using a one-size-fits-all approach, and no longer address the different needs, concerns and risks faced by travel agents today.

NewGen ISS is proposing to move from the current one-size fits all accreditation and to offer greater flexibility through the introduction of 3 models of accreditation. Agents will be able to choose the model most applicable to their business, as well as to convert across models as their business evolves.
The proposed models are as follows:

Multi-Country Accreditation: a “one-stop-shop” accreditation for agents with operations in multiple BSPs. Multi-Country agents will meet a single global set of requirements and criteria, established in Resolution, and will be able to accredit all their locations worldwide under a single Passenger Sales Agency Agreement.
Standard Accreditation: This model corresponds most closely to the current accreditation, and is for agents operating in a single country. In addition to the accreditation requirements established in Resolution, agents under this model will be subject to those requirements established in the Local Financial Criteria of the BSPs in which they operate, including annual financial reviews. These agents will have access to all the BSP forms of payment, cash, credit card and IATA EasyPay.
Standard Accreditation with No Cash Facility: For agents that do not require a cash facility in the BSP, i.e. access to cash sales, this model will offer an easier accreditation process as there will be limited financial risk.

The objective of this area of focus is to mitigate risk exposure and drive a more secure BSP environment through the introduction of an enhanced risk management framework.

The proposed framework will operate under the following key principles:

Agents participating in the BSP with access to cash as a form of payment, will be granted a maximum capacity, as a monetary amount, for their BSP cash sales outstanding to the BSP.
The chosen accreditation model of the agent will determine the applicable risk management, including which financial assessment will be performed.

Standard Accreditation with No-Cash Facility - no annual financial assessment
Standard Accreditation with Cash Facility – annual financial assessment per local financial criteria
Multi-Country Accreditation – quarterly financial assessment of the head entity

The agent’s history in the BSP relates to its ability to pay and capacity to fulfill financial requirements will be factored into the risk management conditions applied.
Based on the financial assesment and agent's, distinct risk management conditions will apply in relation to financial security requirements, the agent’s established capacity for issuance of cash sales and, when applicable, remittance frequency.
The capacity granted for issuance of cash sales will be calculated based on the agent’s historical BSP cash turnover and remittance frequency. However, measures will be available to agents allowing them to manage their capacity, and to continue selling in a secure manner once their capacity is reached.

IATA is working to introduce a new type of financial security in the form of Global Default Insurance. The Insurance will be optional and in addition to those financial securities currently acceptable under IATA Resolution 850p. It is not intended to replace or exclude other security types, including local default insurance programs (DIPs).

IATA will establish the framework for brokers and global credit insurers to introduce this additional financial security type, but IATA will not be the one providing insurance.

Agents will have the choicewhether to join the global insurance policy if required to provide a financial security. The objective is that for agents, Global Insurance will present a cost effective and flexible alternative to bank guarantees and other types of security. Under the new risk management framework, it will also allow agents to amend their insured amount in a relatively quick time frame and consequently raise their capacity for cash sales.

For airlines, the objective is for the insurance solution to provide strong and reliable coverage that increases the certainty of claims in the event of a default.

NewGen ISS is introducing IATA EasyPay, a new “pay as you go” payment method for agents to issue tickets via the BSP. IATA EasyPay is a closed-loop and proprietary payment system with the following characteristics:

Voluntary – This new payment method will be available to all agents, but it will be up to each agent to decide whether or not to use it. It will not replace existing payment methods.
Secure – To use IATA EasyPay, agents will fund their EasyPay account. At the time of ticket issuance, the IATA EasyPay system will first verify that funds are available in the account. If yes, the system will generate an authorization and the related funds will be blocked. Payment is final upon authorization, and for airlines there is no risk of chargebacks. Agents will nonetheless be able to void and refund their IATA Easypay transactions as per usual through the BSP.
Fast – IATA will settle the IATA EasyPay monies to the airlines using the existing BSP processes, with monies expected to reach the airlines within 48 to 72 hours following ticket issuance.
Economical - With a low cost per transaction, IATA EasyPay will be more cost effective for airlines than credit card transactions.
Flexible - As a secure form of payment, EasyPay transactions will not be part of an Agent’s cash sales at risk. This will offer Agents a means to lower their financial security amounts with IATA, and to issue transactions which are not included in their cash issuance capacity.

IATA EasyPay is a key component of NewGen ISS, as it will enable the introduction of new accreditation models and the new risk management framework.

The Passenger Agency Conference (PAConf) establishes the rules governing IATA’s Passenger Agency Programme and oversees the Travel Agent-Airline relationship.

In September 2016, PAConf adopted Resolution changes which will enable the introduction of the new accreditation models, IATA EasyPay and Global Default Insurance. Resolution text related to the new risk management framework will be presented to PAConf in 2017, pending the outcome of joint Agent and Airline working group, with a target effectiveness for the entirety of the NewGen ISS Resolution from January 1st, 2018.

NewGen ISS has also been presented to and endorsed by other key governance bodies including IATA’s Board of Governors, the Financial Committee and Financial Development Working Group.

In addition, in-depth consultation has been underway with travel agents and airlines. This consultation has taken place through local forums such as the Agency Program Joint Council (APJCs) and Local Customer Advisory Groups - Passenger (LCAG-Ps), as well as with the global travel agency associations through the Passenger Agency Program Global Joint Council (PAPGJC).

Resources

Learn more about NewGen ISS and find answers to some key questions regarding the program.

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