NewGen ISS

2NewGen ISS

NewGen ISS

Integrated Program Elements

Credit Management

Global Default Insurance

Agency Accreditation Models

IATA EasyPay

NewGen ISS has a Customer Centric vision aiming to create a faster environment with a safer

and easier governance, and accreditation practices that will deliver relevant solutions for the

industry.

NewGen ISS is composed of four key interconnected areas of focus:

3NewGen ISS

Standard Accreditation no Cash

Facility

Standard Accreditation with Cash

Facility

Multi-Country Accreditation

Cash

CC

IATA EasyPay

Cash

CC

IATA EasyPay

Cash

CC

IATA EasyPay

Yearly Financial Assessment

Credit Limit

Financial Security / Default

Insurance

Quarterly Assessment of Parent

Credit Limit


Insurance

Credit Limitn/a

Financial Assessment

Chargeback Insurance

Parent Guarantee

incorporated into PSAA

NewGen ISS

Accreditation Models

Agents may voluntarily convert across models as their business evolves, while maintaining their IATA

code(s).

4NewGen ISS

Standard Accreditation with no

Cash Facility


Facility


NewGen ISS

Accreditation Models Value Proposition - Agents

Entry point into the BSP

Minimal financial requirements & related costs may

facilitate retention of existing agents

Flexibility for agents to later convert to a cash facility

Based on current accreditation model but with an

improved risk management process

Access to credit facility and all methods of payment

One-stop accreditation for agents operating in

multiple BSPs

One set of clearly established global requirements

and criteria (includes compliance with local rules)

One risk management process & aggregated credit

limit for the entire group

5NewGen ISS

Standard Accreditation with no

Cash Facility


Facility


NewGen ISS

Accreditation Models Value Proposition - Airlines

Increased distribution potential while minimizing risk

May address loss of accredited agents in specific

markets

Airline choice whether or not to grant ticketing

authority

Based on existing accreditation model

Introduction of credit limit management to mitigate

risk exposure

Parent entity undertakes legal and financial

responsibility for the entire group

Visibility of group’s sales activity across BSPs

Smarter risk management at the parent level and on

a more frequent basis (quarterly)

6NewGen ISS

NewGen ISS

Standard Accreditation

Access to only IATA EasyPay or the Passenger’s Credit Card as forms of payment

Compliance with minimum accreditation criteria

Limited financial risk

Chargeback Insurance or alternative security required to cover risk associated to

Credit Card chargebacks or other ADMs

Standard Accreditation with no Cash Facility:

Accreditation in a single BSP

Minimum requirements ensure all Agents are legitimate businesses selling travel

Agents choose whether to access a Cash Facility

7NewGen ISS

NewGen ISS

Standard Accreditation

Standard Accreditation with Cash Facility:

Access to all forms of payment

Credit limit applicable Calculation will be defined in Resolution

Compliance with minimum accreditation criteria and Local Financial Criteria (LFC)

Annual financial review per Local Financial Criteria

Ongoing Credit History assessment

Financial Security provided based on Agent’s Credit Status / LFC

Financial Security Calculation defined in LFC

Accreditation in a single BSP

Minimum requirements ensure all Agents are legitimate businesses selling travel

Agents choose whether to access a Cash Facility

8NewGen ISS

NewGen ISS


A single accreditation & risk management process for the entire group defined in

Resolution

Any location of the Multi-Country group sharing more than 50% common

ownership will fall under the Multi-Country Accreditation

Multi-Country is open to any agent operating in multiple BSPs that can meet the

applicable requirements

9NewGen ISS

Key features of the Multi-Country Accreditation Framework:

NewGen ISS


Global accreditation requirements and criteria defined in Resolution

Compliance with any local legal requirements

Parent entity signs one PSAA for all locations worldwide

Legal & financial responsibility incorporated into the PSAA

Quarterly assessment of the Parent entity under a Multi-Country Assessment

Framework

Credit history assessed at group-level

Aggregated credit limit established for entire group

Financial Security required if Parent fails financial assessment or credit history

Financial Security calculation defined in Resolution & aligned with Resolution 800f

10NewGen ISS

NewGen ISS

Credit Events vs Administrative Non-Compliances

Credit Event:

Incident related to the agent’s credit

worthiness & ability to pay

e.g. Late/short payment

Administrative Non-Compliance:

Agent failure to comply with

accreditation requirement

e.g. Failure to report change of

location

Current:

Irregularity

Agent failure to meet requirements

incl. matters related to reporting &

remittance rules

Proposed:

Payment-related defaults will continue to result in the withdrawal of all ticketing.

11NewGen ISS

NewGen ISS

Overview of credit management model

Accreditation

ModelCredit Status

Credit

Conditions

Cash

Facility

Financial Review +

Credit History

Financial Security +

Remittance Frequency*

‘Credit’ Available to Agent

* Only applicable for countries with multiple remittance frequencies.

12NewGen ISS

The result of the financial review and credit history will determine the credit status

of an agent and applicable risk management conditions.

One of three status’ will be assigned (A, B or C) will be assigned based on the

following:

NewGen ISS

Credit Status & Conditions

Multi-Country Agent Standard Agent

Financial ReviewMulti-Country

Assessment FrameworkLocal Financial Criteria

Credit History Credit Events number and type

13NewGen ISS

C

B

A

Credit StatusFin. Review Credit History

PASS PASS

PASS FAIL

FAIL PASS

FAILFAIL

Credit Conditions

Cash Facility

Financial Security only if required

in LFC for Standard Agents

Financial Security

Standard remittance frequency of BSP

Standard remittance frequency of BSP

*

Cash Facility

Financial Security

Most frequent remittance frequency in

the BSP*

Cash Facility

Assessment

NewGen ISS

Credit status & Conditions

* Only applicable for countries with multiple remittance frequencies.

14NewGen ISS

NewGen ISS

Credit History Assessment

Credit Events will impact the Agent’s Credit History based on the number of

occurrences:

15NewGen ISS

Agent’s

Credit LimitAgent’s accumulated cash sales

Day 1 Day 2 Day 3 Day 4 Day 5 . . .

Current Period SalesPrevious Period Sales

Remittance Date

Day 6

$

Continued selling

using CC and IATA

EasyPay

Open to advanced

remittances at any

time.

Option to amend

financial security

amount and increase/

decrease credit limit

How will it work?

Managing the credit limit

Open to IATA EasyPay

at anytime

A monetary limit to the agent’s outstanding cash sales (monies

at risk) will be established for all Agents with a Cash Facility.

16NewGen ISS

C

B

A

Credit StatusFin. Review Credit History

PASS PASS

PASS FAIL

FAIL PASS

FAILFAIL

Credit Limit

Assessment

Equal to financial

security amount

provided

NewGen ISS

Credit Limit Calculation

*The Financial Security calculation is a separate calculation defined in Local Financial Criteria

17NewGen ISS

NewGen ISS

Credit Limit Management

Agent pays 60 on

Day 4 in advance of

next remittance date

Agents can manage their credit limit by paying outstanding monies in advance of

remittance date:

Agent’s Credit

Limit re-opens

by 60

18NewGen ISS

NewGen ISS


Agent’s Credit

Limit increases

by 30

Agent provides

Financial Security

for an additional 30

Agents can increase their credit limit by providing additional financial security:

19NewGen ISS

NewGen ISS


Agent’s Credit

Limit decreases

by 30

Agent reduces

Financial Security

by 30

Agents can also choose to provide a lower financial security. In turn, a lower credit

limit will be assigned:

20NewGen ISS

NewGen ISS

IATA EasyPay

A new industry payment method:

‘Pay-as-you-go’ solution

Alternative to cash and credit card form of payment

Voluntary for agents to use

Funds secured at time of issuance (no chargebacks)

21NewGen ISS

NewGen ISS

IATA EasyPay

Available for all Airlines

150 BSPs

Voluntary

Benefits for Agents


150 BSPs

Voluntary

IATA EasyPay

New accreditation

models

Reduced bank

guarantees

Voluntary

Easy

22NewGen ISS

NewGen ISS

IATA EasyPay


150 BSPs

Voluntary

Benefits for Airlines


150 BSPs

Voluntary

IATA EasyPay

Fast

Economical

Globally Available

Secure

23NewGen ISS

NewGen ISS

IATA EasyPay

Agent’s

Credit LimitAgent’s accumulated cash sales

Day 1 Day 2 Day 3 Day 4 Day 5 . . .

Current Period SalesPrevious Period Sales

Remittance Date

Day 6

IATA

Easy-

Pay or

CC

$

Continued selling using

IATA EasyPay or CC

IATA EasyPay may

voluntarily be used

prior to reaching the

Credit Limit

IATA EasyPay will enable the introduction of Credit Limit Management,

but can voluntarily be used at any time

IATA

Easy-

Pay or

CC

24NewGen ISS

NewGen ISS

IATA EasyPay

IATA EasyPay will also enable the introduction of new Accreditation Models, and

can be used by all Agents

Standard Accreditation no Cash

Facility


Facility


Cash

CC

IATA EasyPay

Cash

CC

IATA EasyPay

Cash

CC

IATA EasyPay

Yearly Financial Assessment

Credit Limit


Insurance

Quarterly Assessment of Parent

Credit Limit


Insurance

Credit Limitn/a

Financial Assessment

Chargeback Insurance

Parent Guarantee

25NewGen ISS

NewGen ISS

IATA EasyPay – Account Opening

Acco

un

t O

pe

nin

g

Agent open an EasyPayaccount online

Fu

nd

ing

Agent funds the EasyPayaccount E

P N

um

be

r G

en

era

tio

n

Agent receives EasyPay number from the system

www.iata.org/easypay

Type www.iata.org/easypay and press Enter button

26NewGen ISS

NewGen ISS

IATA EasyPay – Ticket IssuanceT

icket R

equest

Agent requests to issue a ticket through a GDS, selecting form of payment “EP” and using its EasyPaynumber

Au

tho

riza

tio

n R

eq

ue

st

GDS requests payment authorization to EasyPaysystem A

uth

orization If sufficient

funds in Easypay account, amount is blocked and authorization is generated

Tic

ket Is

suance

GDS receives authorization and issues the airline ticket and receipt

27NewGen ISS

NewGen ISS

IATA EasyPay – Airline Settlement and ReconciliationG

DS

RE

T r

ep

ort

ing GDS reports

to IATA all tickets issued during the day

Ca

lcu

latio

n &

Re

po

rtin

g IATA DPCs calculate amounts to be transferred to each airline and issue HOT files

Se

ttle

me

nt

IATA transfers EasyPay amounts to each airline

Reco

ncili

atio

n

Airline reconciles EasyPaypayments with tickets issued

28NewGen ISS

NewGen ISS

IATA EasyPay – Technical Validation & Geographic coverage

4 technical proofs of concept of IATA EasyPay online model

executed in different countries (UK, Austria, UAE, Chile)

IATA EasyPay successfully tested with several providers,

currencies, GDS, Airlines and Travel Agents

Payment Methods Working Group (airline payment experts)

reviewed and validated the EasyPay model

Comprehensive Geographic coverage as a result of consultation

with key providers

29NewGen ISS

Objectives

Reduce default losses for Airlines while facilitating Agent access to Financial

Securities

A Global Insurance Solution

Better addresses the needs of Agents & Airlines:

Strong, flexible & reliable coverage for Carriers

Lower costs & increased flexibility for Agents

Alternative to Bank Guarantees and other acceptable Financial Securities Agent

choice on which to obtain

Can easily be adjusted by Agents in a Credit Limit environment

Aon & Marsh, two leading global insurance brokers will engage insurers to

implement the solution

NewGen ISS

Global Default Insurance Solution

30NewGen ISS

NewGen ISS


Key Principles:

A standardized global default insurance policy that will be brokered to top credit insurance

companies and made available for travel agents to be listed under on a voluntary basis.

A Financial Security type additional to those currently acceptable under Resolution 850p:

IATA will establish a framework for brokers and insurers to introduce this additional

financial security letting the market play

One single policy for which any insurance company may bid

Insurance will be provided by global credit insurers, not IATA

IATA will not participate in the collection of premiums

Global Insurance will not replace DIPs

31NewGen ISS


Benefits

Increases certainty of outcome in event of a travel agent

default or insolvency

Improves claims settlements, thus reducing unrecovered

defaults

Supports sales growth

32NewGen ISS


Benefits

Lower cost than other acceptable Financial Security types

Allows Agents to obtain a higher cover in a short time frame,

and to increase their Credit Limit as applicable

Supports growth in ticket sales

33NewGen ISS

Local consultation underway to gather agent and airline feedback

PAConf approval of NewGen ISS framework in October 2015

Adoption by PAConf of new Resolutions targeted for 2016

Go-live expected in 2017

NewGen ISS

NewGen ISS - Your Feedback

34NewGen ISS

Thank you!

For More Information

Email: [email protected]

Website: www.iata.org/newgeniss