NewGen ISS: IATA establishes a credit limit for travel agencies

Airlines and Travel agencies (OTAs)

NewGen ISS is a program launched by IATA to offer faster, safer and more profitable financial settlement solutions for airlines and travel agencies, according to what the International Air Transport Association states in its digital publication. It is a credit management system through which IATA seeks “a safer sale and mitigate the losses arising from the breaches of travel agencies.”

One of the keys of the software is that it establishes what will be the ceiling for aerial sales that travel agencies can make. Once the spending limit has been exceeded, retailers can only continue issuing airline tickets through a payment system called EasyPay (instant payment to the BSP). The Remittance Holding Capacity (RHC) is the maximum amount that a travel agency will be allowed to sell in cash. Each agency will be assigned a risk status (A, B or C) that will imply a different status in terms of financial guarantee, applicable frequency of funds remittance and calculation of assigned RHC.

This ceiling has already been notified to the agencies and their updates will only be sent by E-mail when the 50, 75 and 100 percent thresholds are reached. The agency’s RHC will be reviewed at least once a year. They will be able to continue issuing tickets but using the IATA EasyPay payment method, provided this payment method has been previously enabled. They will also be able to continue issuing with charge on credit cards and to make advance remittances of total or partial funds to the BSP in order to reduce the pending amounts.

Reservation and issuing of tickets

According to the analysis, one of the main characteristics of this new model is that it provides three types of accreditation: GoStandard, GoLite and GoGlobal, although the agents will be included in GoStandard by default.

GoStandard provides for an annual financial review and continuous assessment of the retailer’s history. It requires a financial guarantee in accordance with the local financial criteria and a payment schedule of the local BSP, in addition to the maximum threshold for Cash sales. Payment methods allowed are Cash, Credit / Debit Cards and IATA EasyPay.

The GoLite model implies for travel agencies to meet minimum financial requirements, and an insurance or alternative guarantee to cover risks inherent to sales. In this case, the payment methods will be those mentioned in the previous section, but the agent that chooses this GoLite model will not have access to the Cash payment method.

The GoGlobal type will require the agencies to undergo a quarterly financial review of the entire group, a financial guarantee, and a threshold for Cash sales. This accreditation is voluntary for agencies present in several BSPs and entails worldwide accreditation through a single contract with IATA.

Although the default classification will be in GoStandard, agencies can voluntarily change the model if they meet the requirements requested by IATA. Any request to change the model of accreditation must be made from GoLite to GoStandard, or from GoStandard to GoLite, through IATA customer portal, and from GoGlobal to GoStandard, or from GoStandard to GoGlobal, using the standardized model. Warning: if a travel agency makes the change to GoLite and, after some time, changes back to GoStandard, it will subject to a risk circumstance irregularity for 24 months.

Travel agencies have received this format with certain reservations because, although the stipulated spending ceiling is quite high and difficult to reach, this limit is feared to fluctuate downward in the future.

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