Bringing airlines and travel agencies closer together through payments

Thiago Medeiros

Head of Sales and Growth, Payer Business, Payments, Amadeus

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In an increasingly challenging market environment, every player across the travel ecosystem is looking to maintain a healthy revenue stream, while ensuring customers are content and continue to return.

A recent pilot conducted by Amadeus with Thai Airways and one of its travel agencies, Select Travel, shows there is a new way to manage payments. During that trial, we found that the challenges faced by both companies were remarkably similar. They want an efficient payment method. For airlines, one where fees don’t eat into their margins and for agents, one that provides good revenues and a strong cashflow. Protection against fraud and bankruptcy is also a pressing issue for both parties, as is limiting complexity in payments to facilitate easier reconciliation and reporting.

It’s against that backdrop that Amadeus, Elavon and Mastercard partnered to deliver an innovative payments approach that benefits both parties. Together, we developed a virtual card providing the following benefits:

  • An agreed fee that delivers an income for the agency while cutting acceptance costs for airlines by up to 70%
  • Fast authorization with payments for agencies and airlines to improve cash flows
  • Protection against fraud with a unique card number for each transaction
  • Default protection for the airline and the agency
  • Simple reconciliation and end-to-end payment control with each transaction automatically linked to the relevant sale.

So how does the process work? When the agency initiates a payment on a Thai Airways booking it uses a virtual Mastercard card. Elavon, one of the leading global payments companies, acts as the acquirer so the airline can accept payments initiated by a wide variety of issuers within Mastercard’s global network.

The Amadeus B2B Wallet Partner Pay solution covers the entire payment flow helping reduce the cost and complexity of receiving and making payments for Thai Airways and Select Travel, as part of an on-going trial.

We hope that this approach will strengthen the relationship between airlines and their agents. The former will benefit from a cost-effective solution that gives them the freedom to further develop their loyalty programmes with an airline branded virtual card, whilst the latter will enjoy faster and simpler payments. These cards allow for different rebate rates or amount paid by way of return or refund, to be applied according to an agencies’ activity with an airline, providing the carrier the flexibility to make payments part of its agency loyalty programme.

This on-going pilot could potentially be applied more widely across the industry. If we can make it work, the future of payments could be through partnerships, which could ultimately, be more beneficial for the entire travel ecosystem.