Jan-Olof Brunila - Swedbank - Stockholm 08 May, 2018, 07:08 1 like Does this new credit transfer payment give the paying consumer the same money back guaranree that major card scheme rules demand from the airline’s bank / psp if the airline goes belly-up before delivery and is unable to refund its consumer? If not, then such a service is on favour of the airline and its bank/psp at the expense of the consumer.

Frank Nolden - Ruding Beheer BV - Veenendaal 08 May, 2018, 08:58 1 like No, there is no money-back guarantee with the PSD2 payment scheme. It will be a real credit transfer, so money taken from the account is money gone. There is an advantage of speed of settlement (bank transaction) and cost (standard credit transfer as opposed to credit card payment) but in my opinion each traveller should be able to select the payment method desired.

Robin Setty - ACI Worldwide (EMEA) Limited - Watford 08 May, 2018, 09:24 0 likes

Obviously huge benefits to the airlines.  However, the benefits to the travellers in terms of less complex payments....really?  Is plugging in your credit card details that complex?  Plus, as @Jan-Olaf Brunila has mentioned, credits cards give the traveller substantial protection.  I think the benefits to the traveller are a case of "lipstick + pig".....unless, of course, the savings that the airlines make result in lower cost travel.  We'll see.

Vanessa Barlow - SAP - London 08 May, 2018, 09:54 2 likes

More airlines could offer ability to pay via existing consumer-friendly, easy to use options such as paypal etc.

Good points made by other commentators on the benefits of credit card guarantees, especially in light of recent high profile airline bankruptcies such as Monarch.

A Finextra member 08 May, 2018, 09:59 0 likes

Counterparty default risk exist in theory even for card issuer. In my view , reduced cycle time brings in efficiency in the whole cycle , favouring to all the stakeholders in the process. Transaction fees and exchange rate commission are the premium paid by traveller to the credit card company. 

Such direct payments are already existing in markets like India. 

A Finextra member 08 May, 2018, 10:14 0 likes

Nice example of using Instant Payments infrastructure to accelerate coporate funds, generating significant working capital. As PSD2 bans surcharing, could we see more uses cases like this in stead of card transactions?

A Finextra member 08 May, 2018, 10:36 0 likes

Agree that this would not be popular with consumers - not least because they would need the cashflow to grab a good fare rather than just pay it off on payday.  And then of course, you would think airlines would know about airmiles...

Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 08 May, 2018, 11:12 0 likes

For as long as I can remember, airlines in India have accepted payments via bank transfer apart from debit / credit card for online ticket booking. Not sure if they still do but, for a while, they even dabbled with Cash on Delivery! I also checked an American airline, it also accepts many modes of payment apart from debit / credit card including Instant Bank Transfer. 

I guess this is news only for European airlines.

Robin Setty - ACI Worldwide (EMEA) Limited - Watford 08 May, 2018, 11:23 0 likes

@Katharaman - Was that 'cash on delivery' of the ticket or 'cash on delivery' of the passenger? ;-)

Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 08 May, 2018, 13:09 1 like

@Robin Setty :

I'll tell you how COD worked:

You book the ticket online. You don't receive any eTicket. A delivery boy - always a boy - comes home after 1-2 days. You pay him by Cash or Card on Delivery. Five minutes later, you get an email with the eTicket. Transaction over.

To me, this mode of payment comes closest to "Cash on Delivery of Delivery Boy" rather than Cash on Delivery of Ticket or of Passenger but I'll accept whatever you decide:)

#DigressionAlert: I don't know why but your question reminds me of 3M's ingenious "lifetime warranty". Back in the day when floppy diskettes were a thing, 3M used to sell floppy diskettes under the brand name IMATION. Its USP was that it came with a “lifetime warranty”. Everyone assumed it was lifetime of the customer. When a floppy became defective, most customers would just chuck it. But there was always this one-odd customer who would approach 3M with a warranty claim. It was only then they learned that “lifetime” meant the lifetime of the diskette! Since the diskette was defective, its lifetime was deemed to have ended. Ergo the warranty had expired. Quite often, this happened within the first year of purchase of the diskette. So, effectively, 3M’s so-called lifetime warranty actually provided a shorter cover than its competitors' standard one-year warranty!

A Finextra member 08 May, 2018, 13:55 0 likes

This instant payment service is also good for airlines in financial distress: Just put up an ad on new exiting destinations for low fare - next year. People will book and pay to get the attractive introduction offer and the airline gets paid instantly and improves its cash flow and survives a few months more but will be in receivership well ahead of the due date for the new exciting destinations and the consumers do not get any refund.

It is also good for complete fraudulent "merchants". Since the credit transfer service does not have any "merchant sign-on rulebook" like the card schemes have, it will be easy for crooks to join the "instant payment scheme" and defraud monies instantly from the consumers and disappear into thin air when questions on delivery are started to be asked.

Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 08 May, 2018, 14:25 1 like

Hey @FinextraMember:

Is that an extremely cynical worldview or a subtle shill for card schemes?

Like I said earlier, airlines outside Europe have been receiving payments via bank transfer for ages and the sky hasn't fallen (sorry to mix my metaphor). While European airlines have a lot of scope for improvement in CX, IMO they're no greater or lesser crooks than airlines anywhere in the ROW.

Arjeh Van Oijen - Icon Solutions - Amsterdam 08 May, 2018, 14:58 0 likes

PayPal is offering their customers purchase protection, also when the actual settlement against the customer account does to take place via a credit card (but for instance a direct debit). It  is a choice of the TPP (paypal in this case) in  the way it positions and charges its payment services. The advantage of the existing card schemes is that the protection, including charge back rules, covers the complete chain, from card holder, issuer, acquirer till merchant.

A Finextra member 08 May, 2018, 15:47 0 likes

Dear Arjeh

Paypal is a Payment Service Provider with its own payment accounts and a Luxembourg bank license and not a third party payment provider (TPP). One could claim that paypal is more like "card scheme" that uses other card schemes to top up its own payment accounts...