Airports and airlines globally are upgrading their IT infrastructure in order to improve customer service, increase flexibility, process ancillary revenues, reduce costs and enhance data security. Investments are being made in key technologies, including payments acceptance systems, in order to achieve these objectives.
Common Use infrastructure
Airlines, airports and ground handlers recognise the need for shared infrastructure and are increasingly introducing common use systems and services for a range of use cases including for check-in work stations, self-service kiosks, departure gates, bag drop points, baggage systems and for flight displays. These shared services, typically adhere to industry standards including the Common Use Passenger Processing Systems (CUPPS) and are delivered by large infrastructure suppliers like SITA, Amadeus and IATA. Without common use infrastructure each airline would need to install their own proprietary self-check in kiosks and equipment. Common use systems are a high priority for large international airlines that like to have systems consistency globally.
A key market trend is for applications used by airlines and airports to be moved into the cloud. This offers many advantages for both the carrier and terminal operator. Operational efficiencies and cost savings head these list of advantages. Cloud deployments can be scaled rapidly to match customer demand levels, can be managed centrally by a smaller IT team - reducing local maintenance needs and the number of staff requiring airside security clearance, be designed to increase service resilience and availability, allow updates to be introduced more quickly and ensure stronger data security protection. Cloud implementations can be offered under more flexible commercial arrangements and even based on the level of consumption or on pay-as-you-go terms. This use of common infrastructure reduces capital costs and allows operating costs to be spread according to activity. By moving to a cloud provider and deployment airlines are reducing dependency on the airports IT infrastructure capabilities and capacity. Cloud deployments and Common Use systems can be implemented together. These technology approaches work seamlessly together and are complementary.
Ancillary revenue streams are a high priority for airlines today as competitive market pressures have driven down ticket prices. Airlines are therefore seeking solutions that allow travellers to pay for excess/over size baggage fees, for seat upgrades, on-flight meals and other chargeable extra services directly at the check-in counter or at a self-service kiosk. Chip & PIN and contactless options must be accepted at each acceptance point in order to comply with card scheme rules, prevent fraud and in order to attract the lowest transaction processing charges. Payments acceptance has specific challenges in a common use environment as each airline has its own sales application to support, merchant acquiring relationship and configuration settings. They don't however want to rely on dedicated payment terminals or making customers walk distances in order to pay. We call this need true multi-merchant & multi-acquirer payments acceptance. The payments software application must be able to support this complexity and automatically dynamically reconfigure itself for each customer transaction without adding time delays. Common use payment systems are now available from large infrastructure providers to deliver this. Payment systems should support point-to-point technology in order protect card details and this will help simplify PCI DSS compliance and allow the same common infrastructure solutions to be used at multiple airports globally.
In Europe, airlines need to be compliant with the new PSD2 Strong Customer Authentication regulations by the 14th September 2019. This is forcing the replacement of old magnetic stripe only acceptance devices at check-in desks, kiosks and service counters with Chip & PIN terminals in order to satisfy the two factor authentication requirements. Without PIN entry being completed by the customer card transactions risk being declined by card issuers.
Airlines, like all merchants, pay close attention to transaction processing fees. For high transaction values the % based merchant service charge (MSC) can represent a high amount. Account-to-Account bank transfer payments offer an alternative to card processing and are charged at a fixed cost for each transaction. IATA and Deutsche Bank have been working on a trial to introduce this new payment option for airlines with a service called IATA Pay. The ability to support a greater choice of payment methods and options is a further reason for investment by airlines and airports in infrastructures like cloud and common use systems.
The STS viewpoint
STS is a leading payments acceptance application developer with unrivalled EMV Chip and PIN expertise. Although the company is based in the UK, we have supplied over 150,000 merchant implementations located around the world and worked extensively in the airline and travel sectors. We have strategic partnerships in place with airline and transportation sector leaders. Our proven airline solution supports secure card payments acceptance within airport terminals and on-board planes and it has been designed for cloud deployments and common use infrastructure multi-merchant environments such as kiosks and check-in desks. Our on-board solution supports card scheme offline transaction processing rules including deferred authorisation, forced acceptance, blacklists and stand-in processing. All solutions also deliver comprehensive operational management, realtime monitoring and remote management of devices.
We are a product-led company that invests heavily in developing high-quality payments acceptance applications and features in order to remain at the forefront of payments innovation. This started with EMV Chip and PIN payments in which we became a global market leader and now includes contactless, in-store mobile payments, payment cloud implementations and the management of Internet of Things (IoT) devices. Our applications are designed to allow partners to establish competitive advantage. We have earned a reputation for trust, honesty and integrity by continually delivering high quality software and excellent support throughout our 21-year heritage.
Please do get in touch to discuss this topic in more detail.
Bing Dai, Chief Commercial Officer, STS
+44 (0)20 8680 0252