Controversial payment resolution to be scrapped?

INDUSTRY professionals
are quietly confident that
2016 will be the year that
resolution 890, found in the
Iata Travel Agents Handbook,
is finally scrapped – or at the
very least, reviewed.
The resolution warns
against travel agents using
their private credit cards to
complete transactions on
behalf of their clients.
While it is considered a
commonplace practice, agents
still stand the risk of losing
their Iata accreditation should
they be caught in the act.
“The recommendation to
scrap, or at least review
the wording of, resolution
890 will once again be put
forward to the Passenger
Agency Conference (PAConf)
in June this year and we are
cautiously optimistic that this
time around, we might actually
see results,” Asata ceo, Otto
de Vries told TNW.
He says recommendations
to review resolutions are
deliberated by the local
Agency Passenger Joint
Councils (APJC) then put
forward to the Passenger
Agency Programme Global
Joint Council (PAPGJC) – on
which Asata has a seat
through its membership
at the World Travel Agents
Associations Alliance.
But the work and proposals
processed through local
APJCs and ultimately the
PAPGJC are recommendations
only – changes to resolutions
are ultimately decided at
PAConf.
According to Otto,
recommendations to review
resolution 890 have been
put forward for the last
three years, but have been
defeated each time because
the final ruling needs to be a
completely unanimous vote.
“We put it forward again to
PAConf in October 2015 but
it was narrowly defeated and
has been referred back to the
Payments Methods Working
Group for further review,”
Otto says.
Tourvest Travel Services cfo,
Lidia Folli, who was appointed
to the APJC in 2012, agrees
that PAConf is very close to
realising that the resolution
needs to be updated.
“They have to take into
consideration what the current
market practice is and leave
the credit rating function to
the banks because the bank
essentially takes the risk if
agents use their own credit
cards anyway,” she says.
Meanwhile, as Iata’s new
local financial criteria begin
to kick in and agents who
opt not to enter the default
insurance programme are
required to remit large
financial security amounts on
either a weekly, fortnightly or
monthly basis, Lidia predicts
agents will seek alternatives
to keep their cash sales
down.
“While the resolution forbids
agents using their private
credit cards to complete
transactions, it could be done
to reduce the guarantee,
which Iata considers a risk,”
agrees, Sure Travel ceo, Vanya
Lessing.
Furthermore, Lidia fears
there may be some market
fallout if agents find they are
no longer Iata accredited
because they were unable to
put up their guarantees.
“Should this happen,
however, I think it will give
PAConf more incentive to
reconsider its position on the
resolution,” she said.
Indeed, the call from the
travel trade to have resolution
890 scrapped continues to
grow – and is expected to
gain traction as complications
from the LFC arise.
One agent told TNW that
using a private credit card
instead of issuing cash tickets
not only kept cash sales
down, but protected agents
against misplacing numbers
and under- or over-paying BSP
in terms of cash sales owed –
thus risking their Iata licence
anyway.
What’s more, the resolution
in its current state left smaller
agencies vulnerable to having
their licence revoked as
their payment patterns were
easier to monitor than those
of bigger TMCs, the agent
added.
“I could never understand
why an agent could not use
their own card or even a
company corporate card,”
says Marco Cristofoli, md
of Harvey World Travel in
Southern Africa.
He points out that if there
were insufficient funds or the
amount was rejected for some
reason on the agent’s card, all
that would happen would be
that the agent would get an
ADM – just as they would with
a client’s card.