New payment line to reduce TMC-corporate conflict

CARD payment solutions
provider, VISA, has introduced
a new payment standard that
recognises the growing trend
in ancillary purchases.
VISA recently introduced a
new ‘ancillary’ payment line,
which includes any non-ticketrelated
purchases, such as
in-flight meals, WiFi, baggage
fees, seat upgrades and
entertainment. Previously, all
airline payments were lumped
together as one ticketingrelated
charge, making
reporting a challenge. For
example, a charge for WiFi,
would appear as
‘AirlineName0014567891014’,
whereas under the new
standard, this charge appears
as ‘AirlineName Wi-Fi’.
VISA’s head of merchant
sales, Ramon Martin, says
the airline industry’s changing
business model has seen
ancillary sales increase by
nearly 400% since ancillaries
were first introduced in 2008.
“VISA’s new standard will
allow airlines to process
these transactions so that
they are distinctly identified
and categorised from ticket
purchases. This offers real
benefit to both businesses
and consumers as ancillary
purchases now account for
approximately 50% of all
airline transactions.”
“This will reduce conflict
between the corporate and the
TMC as, in the past, anything
travel related was sent directly
to the TMC for explanation and
invoicing thereof,” says Marco
Cristofoli, md of Harvey World
Travel Southern Africa.
Melanie Walljee, md of FCM
Travel Solutions, welcomes the
development. She says the
VISA reporting process has
been a nightmare to date. As
a result, TMCs would advise
clients to opt for American
Express, which has been
identifying ancillary charges for
the past two years, she says.
HRG Rennies Travel has
seen ancillary expenses gain
traction, says Maurice De
Vries, director of business
solutions. “Although it is still
small in the context of the
overall travel spend, it has
become relevant enough to
reflect in travel management
reporting. If ancillaries are
lumped together with the
airfare, this starts to skew
the average ticket prices and
affects the trend analysis for
the corporate.”
Maurice says most
companies have started
including ancillaries into their
corporate travel policies.
“Ancillaries were not part
of most corporate travel
policies in the past and were
booked via the TMC using the
individual traveller’s personal
card. We are seeing a rapid
change within the market and
the management of ancillary
costs now has a place in the
travel policy of the corporate.
“It’s now up to the airlines
and TMCs to change their
processes to capture ancillary
costs separately in order to
make use of this feature.
Doing this will enhance
the value of reporting data
and provide the client with
enhanced visibility of financial
expenses,” he says.