IATA has rolled out a global electronic billing and settlement system meant to facilitate business between agents and nonair suppliers or airlines settling outside ARC and IATA. Settlement refers to payment of commissions as well as agency or tour operator payment to suppliers.
The Web-based system, called Travel Industry Exchange Settlement Solution, has been operational for about three months with Via Rail and WestJet in Canada as supplier participants.
TIESS, pronounced "ties," provides settlement services for the two Canadian suppliers and about 850 travel agencies, most of which also are in Canada, said Bert Rivero, IATA's regional director for the Americas.
He said the system would go live in the U.S. as soon as a supplier signed on for purposes of settling with U.S. agents, and he predicted current conversations would produce at least one deal within about 30 days; meanwhile, he added, one U.S. agency has signed on as a test site.
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 with Via Rail as the charter supplier. The Canadian rail company remained with ITSS until the switch to TIESS, but Rivero said the first setup didn't catch on because it did not meet everyone's needs.
Specifically, he said, the 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."
Crucially, he said, the system is free to agents; they only need access to the Web.
Rivero said IATA had interviewed "a whole bunch of travel agents" about their needs, and they raised three basic issues:
- Speed: Commission payments take too long, "up to 190 days," and sometimes end up in the wrong currency;
- Ease of use: If there is a dispute over who owes whom how much, "it is nightmare" of faxes and emails; and
- Cost: Agents do not want to pay to be connected to a settlement system.
For the supplier that signs on, Rivero said, it is a chance to be more competitive based on the promise of prompt payment of commissions. Suppliers also have the capability to set the frequency and timing of all commission payments and to pay different groups of agencies or operators based on different terms. The agencies could be treated differently based on productivity, country or state, or even by ZIP code, Rivero said.
Payments are electronic, he said. If a supplier generates an invoice for prepaid travel, the retailer 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 rentals, the supplier pays into the recipient'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.
In addition to the settlement and payment functions, the system offers a GSA module that enables suppliers to invoice their general sales agents electronically. American Airlines is a subscriber.
