Overview card payment current workflow. October 2016

Transcription

1 Overview card payment current workflow October 0

2 DISCLAIMER NOTICE The information contained in this document is subject to review in the light of changing business needs of the industry, government requirements and regulations. Both Edgar, Dunn & Company and IATA take no responsibility for the completeness of this document. Readers are solely responsible for all decisions made based on this document

3 Current generic payment workflows: the following slides describe a simplified view of the current generic payment workflows Three workflows are mapped out describing the current situation: Direct sales via airline.com (airline = Merchant of Record - MOR) (out of scope of this project) Indirect sales via travel agent Agent = MOR, with a BSP cash transaction (out of scope of this project) Airline = MOR, with a BSP card transaction Note: in an airline environment, the authorisation/capture is usually based on a dual message communication (versus a single message, where the authorisation and capture happen simultaneously) Each workflow shows three key steps Step : the authorisation request / authentication stage for a payment transaction This is typically undertaken at time of purchase (i.e. when consumers/buyers provide their payment details and proceed with the buy button) Step : exchange of payment data used for clearing (so called invoice file or capture ) This typically involves a daily exchange of files (e.g. at the end of each business day) Step : financial settlement whereby the merchant is paid This is typically a daily credit transfer into the merchant s bank account X days after clearing

4 Current generic payment workflows Direct sales via airline.com - Airline is MOR Current situation - Direct sales - Airline = MOR - Generic flow Typical transaction flows of an airline ticket purchase with a bank card through direct channel Purchase airline ticket Airline.com a OR b Airline s PSP Hosted Airline s Acquirer Data exchanged Financial data Airline network Txn data file. The buyer purchases an airline ticket on airline.com. The buyer pays on the airline s payment or is redirected to the PSP s hosted (if this set up is in place - a token is often created by the PSP and shared with the merchant). The PSP requests an authorisation and receives a response, involving the payment network, the airline s acquirer and the issuer. Transaction data file (can be referred to as capture or as billing file ) is sent from the airline s acquirer/psp to the issuer, via the payment network - Clearing. Settlement takes place from the issuer, via the the payment network; then to the acquirer/psp and airline

5 Current generic payment workflows Indirect sales via travel agent - B. Agent = MOR, with a BSP cash transaction Current situation - Indirect sales - TA = MOR - Generic flow Purchase airline ticket Agency cash sales GDS IATA s BSP Airline Data exchanged IATA BSP on daily basis Financial data Txn data file Txn data file network Agent s Acquirer. The buyer books and purchases an airline ticket via a travel agent, which checks availability and pricing via GDS. The travel agent reports a BSP cash sale in the GDS and buyer pays the travel agent by e.g. card. The travel agent requests an authorisation and receives a response, involving the payment network, the travel agent s acquirer and the issuer. Transaction data file is sent from the travel agent s acquirer to the issuer via the payment network. Simultaneously to., transaction reporting via the BSP to the airline. Daily settlement of airline ticket from the issuer via the payment network; and then from the travel agent s acquirer to the travel agent. Weekly/monthly settlement transactions cash via the BSP Note: in order to simplify the flows, EDC described the payment flow in a non-e-commerce environment, hence no PSP involved

6 Current generic payment workflows Indirect sales via travel agent - B. Airline = MOR, with a BSP card transaction Purchase airline ticket Agency Current situation - Indirect sales - Airline = MOR card sales GDS Generic flow IATA s BSP OR Airline Data exchanged IATA BSP on daily basis Financial data network log Txn data file Airline s Acquirer Note: in order to simplify the flows, EDC described the payment flow in a non-e-commerce environment. The buyer books and purchases an airline ticket via a travel agent, which checks availability and pricing via GDS. The travel agent reports a BSP card sale in the GDS. GDS requests an authorisation via a direct link with payment networks, receives a response and sends the response back to the agent. network sends, in some cases, the authorisation files (or log - TCs) on a daily basis to airline s acquirer. Transaction reporting via the GDS through the BSP to the airline and to the airline s acquirer or directly to the airline s acquirer. Transaction data file is sent from the airline s acquirer to the issuer via the payment network. Daily settlement of airline ticket from the issuer via the payment network; and then from the airline s acquirer to the airline

7 Currently, for some of the use cases, the infrastructure and set up in place do not enable airlines to be the MOR Current situation: purchase of an airline ticket via a travel agent The airline cannot be the merchant of record in three cases: Purchase online with a secured authentication including, e.g. D Secure authentication Purchase online with a wallet such as PayPal Purchase online where the buyer pays with a bank transfer Purchasing an airline ticket via a travel agent - Use cases agent is MOR Airline is MOR E-commerce unsecured transaction E-commerce secured transaction E-commerce purchase with a wallet E-commerce purchase with a bank transfer Call centre purchase with a lodge card 7

8 E-commerce unsecured transaction - Airline is MOR Paying airline ticket with a card online Current situation - Indirect sales - Airline = MOR - e-commerce unsecured transaction Data exchanged IATA BSP on daily basis Financial data Agency card sales GDS IATA s BSP Airline O R a b Hosted Agent s PSP network log 8 Txn data file Airline s acquirer. The buyer books and purchases an airline ticket via a travel agent s website, which checks availability and pricing via GDS.. The buyer is on the TA s payment or redirected to the PSP s hosted (if this set up is in place). GDS or Agent s PSP requests an authorisation and receives a response, involving the payment network and issuer. network sends, in some cases, the authorisation files ( log - TCs) on a daily basis to the airline s acquirer. Transaction data file is sent to the issuer, by the GDS via the BSP, airline/airline s acquiring bank and payment network - clearing. Settlement taking place between the issuer, via the payment network; then to the airline s acquirer, which credits the airline s account

9 E-commerce secured transaction - agent is MOR D Secure Paying airline ticket with a card online Agency Current situation - Indirect sales - TA = MOR - e-commerce secured transaction cash sales 8 GDS IATA s BSP 8 Airline Data exchanged IATA BSP on daily basis Financial data a O R b Hosted Agent s PSP Txn data file network 7 7 Note: it is currently not possible for the airline to be MOR in the case of a secured transaction, with D Secure Agent s Acquirer 7. The buyer purchases an airline ticket via a travel agent s website, which checks availability and pricing via GDS. The buyer is redirected to the PSP s hosted (if this set up is in place). Cardholder authentication (D Secure) - link between the travel agent s PSP and the issuer. The travel agent s PSP requests an authorisation and receives a response, involving the payment network, the travel agent s acquirer and the issuer. Transaction data file is sent by the acquirer to the issuer, via the payment network - Clearing. Reporting of cash sales via the BSP 7. Daily settlement of airline ticket from issuer via the payment network; and then to the travel agent s acquirer, which credits the travel agent s account 8. Weekly/monthly settlement transaction cash via the BSP 9

10 E-commerce purchase with a wallet, e.g. PayPal - agent is MOR Current situation - Indirect sales - TA = MOR - wallet Technical flows Customer experience PayPal General flows for direct connections to PayPal (API calls) when a buyer purchases on travel agent s website Checkout Confirmation If immediate debit Capture Funds transfer - Amount - Currency - (invoice order ID) a b Token Token PayPal server PayPal login Confirmation of the payment orisation Batch with other transactions Flows in details:. The buyer clicks on the PayPal button. a) API call to PayPal s server b) A token is created and sent to the travel agent. The buyer is redirected to PayPal login for authentication. The buyer confirms the transaction, chooses form of payment and the delivery address (list of payment methods available varies per country). The travel agent receives the authentication confirmation. The travel agent requests the authorisation (or can skip and go to immediate debit / capture) 7. orisation accepted (but does not provide any guarantee) 8. Capture Can be accepted or declined by PayPal Must be initiated BEFORE the ticket is issued. If PayPal accepts this transaction, it does not provide a full guarantee (to be negotiated with the merchant) 9. A bank transfer is automatically processed the following day to the travel agent s bank account. As soon as the settlement is processed, the travel agent would receive a daily file (via secure FTP server) with all the transactions occurred or cancelled from PayPal, with details for reconciliation Source: PayPal 0

11 E-commerce purchase with a bank transfer, (ideal) - agent is MOR Online banking Customer makes ideal payments from a bank account at a licensed issuer Current situation - Indirect sales - TA = MOR - bank transfer 7 8 Booking and payment Agency 9 0 Redirect Real time ideal messages Fund transfer via e.g. SEPA credit transfer (within few days) Real time Agent s Acquirer Merchant enters into an ideal agreement with a licensed acquirer agent s account credited Note : CPSP = collecting payment service provider - with a role of collecting funds - optional to select one ideal is offered by around 8-9 acquiring banks and 0 CPSPs. If a merchant would like to offer ideal to customers, they will need to agree a contract with one of these parties. They will also provide the merchants with support in the technical implementation of ideal within their online checkout system Note : The buyer sees CPSP as the beneficiary of the payment on bank s statement; and the airline in a reference field/line. This is standard procedure for all ideal payments (~ 0%) with a CPSP involved ideal messages CPSP. The buyer selects the items to purchase. The buyer selects ideal as a payment method and selects his issuing bank. An ideal message is exchanged between the travel agent s acquirer and the issuer. The buyer is redirected to the bank of his choice (his issuer). The issuer presents the landing to the buyer, which offers the option to complete the ideal payment on the online banking interface. The buyer logs in, confirms the pre-filled ideal payment and authorises it. Once completed, the issuer immediately sends a payment guarantee to the travel agency via the acquirer 7. After completion of the payment, the buyer is shown the result of the payment by the issuer. The buyer is redirected back, by his bank, to the travel agent s web using the merchantreturnurl 8. The travel agent displays the buyer the confirmation of the ideal payment 9. Reporting of cash transaction sales via the BSP 0. Weekly/monthly settlement cash transactions via the BSP Source: ideal

12 Call center purchase with a lodge card - Airline is MOR Paying with a lodge card via call centre Manageme nt Company (TMC) Current situation - Indirect sales - Airline = MOR call centre with lodge card card sales GDS IATA s BSP Airline Data exchanged IATA BSP on daily basis Financial data TMC Call centre network 7 log 7 Airline s acquirer O R 7. The buyer calls the TMC to book an airline ticket and indicates that he will pay by lodge card. TMC checks availability and pricing via GDS. TMC accesses the buyer s profile. The TMC reports a BSP card sale in the GDS. The GDS or TMC s PSP requests an authorisation and receives a response, involving the payment network and the issuer. network sends, in some cases, the authorisation files ( log - TCs) on a daily basis to airline s acquirer. Transaction reporting via the GDS through the BSP to the airline and to the airline s acquirer or directly to the airline s acquirer. Transaction data file is sent to the issuer, by the airline s acquiring bank and via payment network - clearing 7. Settlement taking place between the issuer, via the the payment network; then to the airline s acquirer crediting the airline s account

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