Airlines Aim To Cut Credit Card Fraud Costs

by Ulrika Lomas, Tax-News.com, Brussels

29 September 2009

On September 24, the International Air Transport Association announced the launch of two new services to help airlines reduce costs and manage risk associated with credit card operations.

Firstly IATA has launched its ‘CreditCard Optimisation Service’. The service will reduce commission rates and service charges, improve speed and method of payment and create a single point of contract for all credit card negotiations. The negotiations will be based on complete audit of all credit card contracts of a participating airline and the results will be benchmarked against a proprietary database to identify gaps. New agreements will then be negotiated with banks to bring greater savings. This service is being offered in cooperation with CreditCard Optimisation Ltd.

The second service called IATA Perseuss is an online database, which allows airlines to legally share data about fraudulent credit card transactions. Payment card fraud is estimated to cost the airline industry close to USD1.4bn annually. IATA says that identifying fraudulent transactions is critical to driving down costs. Currently, some 40 airlines are using the service and already contributed over 800,000 data elements.

The Association noted that the two services are particularly relevant as they will help bring about cost reductions whilst increasing efficiencies, an area under particular scrutiny as the airline industry faces an estimated loss of USD27.8bn this year.

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