IATA introduces non-air settlement system
IATA on Friday formally launched a global electronic billing and settlement system meant to facilitate business between travel agents and non-air suppliers or airlines settling outside ARC or IATA.
Settlement includes the payment of commissions as well as agency payment to suppliers.
The web-based system, called Travel Industry Exchange Settlement Solution (TIESS), has been operational for about three months and has three supplier participants: Via Rail and WestJet in Canada and American Airlines´ general sales agent (GSA) offices.
TIESS is facilitating settlement with about 850 travel agencies, most of which are in Canada, according to Bert Rivero, IATA’s regional director, the Americas.
He said it will go live in the U.S. as soon as a supplier signs on for purposes of settling with U.S. agents. He predicted current conversations will produce at least one deal within about 30 days. Meanwhile, he added, one U.S. agency is a test site now.
Vendors have previously aspired to create this kind of system to smooth transborder billing and settlement between nonair suppliers and agents, and IATA was one of those vendors. Five years ago, it rolled out IATA Travel Settlement Services (ITSS) with Via Rail as the charter supplier.
The Canadian rail company remained with ITSS until the switch to TIESS, but the first setup didn’t meet everyone’s needs, Rivero said. Suppliers had to adapt to the system, meaning they had to deliver their data in a format prescribed by ITSS, whereas TIESS will take any file in any format, Rivero said. Crucially, he said, the system is free to agents.
Rivero said IATA had interviewed "a whole bunch of travel agents" about their needs, and they articulated three basic issues: commission payments take too long, up to 190 days, and could be in the wrong currency; if there is a payment dispute, a "nightmare" of faxes and emails ensues; and agents did not want to pay for a settlement system.
Rivero said TIESS offers suppliers a chance to be more competitive based on the promise of prompt payment of commissions. Suppliers also have the capability to customize the frequency and timing of commission payments. Agencies could be treated differently based on productivity, country, state or zip code, Rivero said.
Payments are electronic. If a supplier generates an invoice for prepaid travel, the agency or tour operator pays into the supplier’s account maintained at the nearest IATA clearinghouse bank.
For commission payments, usually on behalf of hotels and car rental companies, the supplier pays into the agency’s account, also at the IATA bank, Rivero said.
TIESS provides features to assist with resolving disputes more quickly than has been the case, he added.