World Passenger Symposium 2017World Financial Symposium 2014

World Passenger Symposium 24 – 26 October 2017

Centro de Convenciones Internacional de Barcelona (CCIB)

World Passenger Symposium 2017World Financial Symposium 2014

Distribution and PaymentChange is in the Air!

What Will it Really Take to Change?

World Passenger Symposium 2017World Financial Symposium 2014

Pascal Burg Director, Edgar, Dunn & Company

Distribution and Payment Change is in the Air! What Will it Really Take to Change?Get Ready for the NBD (the Next Big Disruption)!

Pascal Burg | Director at Edgar, Dunn & Company © Edgar, Dunn & Company, 2017

Get Ready for the NBD

(Next Big Disruption) !

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Why talk about “payments” ?

Perception of payments What payments should be

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Why is payments important for Airlines?

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Payments

Card acceptance

costs

Fraud losses

Cash-flow

Risks

Reach

Revenue

“Payments” has multiple impacts on an Airline’s business

Payments impact both sides of the P&L

of an Airline

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Which payment trends?

Payments as a tool to drive additional revenues

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Payments become invisible / transparent

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Payments within chatbots

Alternative forms of payment to unlock specific segments (e.g. Alipay, WeChat Pay)

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“We have such a big percentage of Chinese passengers on many of our

China flights. And Alipay is something they are familiar with. We have the wifi on board on all our wide-body aircraft so that you can use Alipay.

What we’ve seen is up to 200 percent sales increases on board.”

Finnair CEO Pekka Vauramo

Installment options (buy now, pay later) in specific geographies

Fully automated installment payment via Etihad.com

Installment ranging from 3 to 60 months

Involves 17 African banks

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Klarna is a Swedish e-commerce company that provides payment services such as installments for online sales

High adoption in some northern and western Europe countries

Two examples: Etihad in Africa and SAS in Nordics

Creating new point-of-payment (e.g. via kiosks, tablets)

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“Verifone and SITA are first to enable integrated, scalable, and highly secure payment acceptance

at Airports Worldwide”

Example of mobile POS

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Which payment opportunities?

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SCTinst (Instant SCT), an instant bank transfer system, will let people and businesses send money anywhere in the euro area within seconds

Emergence of Instant Payments in Europe …

SCTinst will start from November 2017

Real-time money transfer via banks 365 days a year, in 34 European countries

Current limit: within 10 seconds for transactions less than 15,000€

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Open Banking*

…and of “open banking” driven by the PSD2 (enabling third parties to access the customer bank account with their consent)

* Also known as “access to account”

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What is IATA doing?

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Transparency in Payments: provides transparency / control for each Airline related to Alternative Transfer Methods (e.g. Agent’s VANs)

Enrollment of Alternative Transfer Methods

Upfront validation

Post-ticketing monitoring

Individual Airline consent to accept

1. Transparency

3. Transaction validation

Bilateral discussions

If pattern of abuse: arbitrary party

4. Infringement

2. Airline consent

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NewGen ISS: to deliver a more secure and customer-centric Passenger Agency Program

Remittance Holding Capacity

Global Default Insurance

Agency Accreditation Models

IATA EasyPay

$

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NDC opportunities?

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NDC’s future agenda

Priorities for NDC payments

1. Work in progress to fine-tune message content

2. Fine-tune workflows (e.g. 3D Secure)

3. Fine-tune technical solution for non-card based AFOPs

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Phase 1 360° payments

diagnostic

What are the priority issues?

Phase 2 Payments strategy

Example: Which FOP to accept?

Phase 3 Payments optimization

Example: WhichNDC process?

A three-phase approach for Airlines to optimize payments

Edgar, Dunn & Company is an international management consultancy focused on payments

Edgar, Dunn & Company (EDC) is an consultancy set up in 1978 with offices in North America, the EU and AP

Focus solely on payments

Deep expertise in over 25 countries including Australia, France, Germany, Turkey, UK, USA, etc.

We help merchants such as airlines to optimize payment- related revenues and costs

Travel practice since 2002: clients include airlines, travel agencies, rail operators, hotel chains, etc.

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London

Sydney

FrankfurtParisSan Francisco

Edgar, Dunn & Company1 bis rue du Havre75008 ParisFrance

Tel +33 1 40 07 92 24Mobile +33 6 79 37 55 47

pascal.burg@edgardunn.com

Pascal BurgDirector

Istanbul

World Passenger Symposium 2017World Financial Symposium 2014

Moderator: Paul Tilstone, Managing Partner, FESTIVE ROAD and Board Director,Panelists: Bill Brindle, COO, Hogg Robinson Group Holger Taubmann, Former Senior VP of Distribution, Amadeus Gareth Williams, CEO & Founder, Skyscanner Diane Lundeen Smith, Global Travel Sourcing Manager, Microsoft

Distribution and Payment Change is in the Air! What Will it Really Take to Change?Panel Discussion: But Where are the Elephants?

World Passenger Symposium 2017World Financial Symposium 2014

But Where Are The Elephants?

Paul TilstoneManaging PartnerFESTIVE ROAD

World Passenger Symposium 2017World Financial Symposium 2014

But Where Are The Elephants?

World Passenger Symposium 2017World Financial Symposium 2014

But Where Are The Elephants?

Holger Taubmannex – SVP Distribution

Amadeus

Bill BrindleCOO

Hogg Robinson Group

Diane Lundeen Smith Microsoft & Travel Manager

Advisory Group

Gareth Williams CEO & Founder

Skyscanner

World Passenger Symposium 2017World Financial Symposium 2014

Paul TilstoneManaging PartnerFESTIVE ROAD