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Emirates tests new way for passengers to pay for air tickets

Emirates has taken part in live tests of a new air ticket purchasing system designed by the International Air Transport Association (IATA).

IATA on Tuesday announced the successful completion of the first “IATA Pay” ticket purchase transaction in a live test environment.

The transaction was conducted in partnership with ipagoo, a UK-based fintech company, and involved Cathay Pacific Airways, Scandinavian Airlines and Emirates, IATA said in a statement. 

IATA Pay is an industry-supported initiative to develop a new payment option for consumers when purchasing a ticket directly from an airline website.

It is made possible by the European Commission’s second Payment Services Directive (PSD2), and the UK’s Open Banking regulation. These regulations encourage use of so-called direct debit transactions in which payments are made from the customer’s bank account directly into the bank account of the merchant.

IATA said this method offers an “extremely high level of security” to both user and recipient and can be instantaneous.

It added that for airlines, the advantages of IATA Pay are cheaper payment option compared to other alternatives, highly secure, faster cashflow with instant/near instant payment to the merchant and simpler payment process resulting in fewer lost sales. 

For consumers the benefits include access to a new, simpler method of payment that is highly secure.

“Today’s consumers, and especially millennials, have expectations of multiple payment options including mobile and peer-to-peer. IATA Pay responds to these expectations. At the same time, airlines are trying to manage significant card payment costs – $8 billion per year and rising,” said Aleksander Popovich, IATA’s senior vice president of Financial and Distribution Services.

IATA said it is also working with Deutsche Bank on a prototype for Europe (excluding the UK), starting with the German market, which is expected to undergo testing in early 2019.

Following this, IATA plans to validate the concept with the intention to expand to other regions.

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