Deutsche Bank has collaborated with the International Air Transport Association (IATA) to trial a new payments solution intended to minimise costs for payment processing between airlines and their clients.
Under the pilot project, Deutsche Bank will collect payments directly from consumer accounts, thus eliminating the need for credit and debit card transactions.
The bank expects its new solution to be fast, transparent and secure with a two-factor authorisation in order to ensure better fraud protection for IATA and its member airlines.
In addition, the member airlines can benefit from acceleration of their funds due to near-real time processing and receiving of direct payments, leading to significant working capital and liquidity benefits.
These benefits are expected to decrease the approximate $8bn incurred by IATA members from payment processing costs and fraudulent activity and offer travellers smooth and convenient transaction process.
Deutsche Bank global head of cash products Shahrokh Moinian said: “This solution marks our strong commitment to innovation and our desire to transform regulatory initiatives into opportunities for our major clients involved in the B2C industries – starting with IATA.”
IATA head of banking for EMEA and the Americas Javier Orejas said: “The direct payment model promises significant cost savings and efficiency gains for our members.
“With airlines paying huge amounts for transaction fees and compliance – in addition to losses sustained due to fraud – this is a highly valuable innovation for the industry.”