Visa simplifies airline purchases

As part of an ongoing effort to simplify rules and work more closely with acquirers and their customers, Visa Inc. recently disclosed a new standard for identifying airline-related purchases. Airline acceptance of credit and debit cards has been on a steep upward trajectory for several years now as individual carriers introduce more fees, said Ramon Martin, Global Head of Merchant Solutions at Visa.

Sales of these "ancillary services" (like additional luggage, seat upgrades and in-flight meals), in fact, are up 400 percent, he added. Based on current estimates, Visa said ancillary purchases presently account for about 50 percent of all airline transactions.

Under the new changes, instead of lumping together these ancillary fees with ticket charges, the expenses can now be identified distinctly and categorized accordingly for airline and customer records. For example, a transaction that might have read "Airline Air 0014567891014" in the past will now get posted as "Airline Air WiFi," Martin stated last in a post to Visa's company blog.

New standard 'a major advance'

The change has been several years in the making, Martin said. Tnooz, a news and information service for the travel sector described the new standard for identifying airline-related purchases as a major advance. "The shift isn’t as simple as one would think, as [Visa] had to work with each airline to create a global standard that would allow the payment processing technology to deliver the correct meta data with the purchase," Toonz said.

Tnooz also noted that the shift will allow carriers and Visa to keep closer tabs on how much travelers are spending on ancillary services. "Up to date, there have been mostly estimates without a direct tie to payment data," Tnooz noted.

"This change offers great benefits to the airlines themselves, including the reduction of back-office costs and improved customer service, with the benefits cascading to business and leisure travelers, too," Martin wrote. "Businesses will be able to improve corporate travel reporting, with access to more granular data."

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