Payments platform Paysafe has rolled out a its payments ‘safeguarding’ acquiring model for airlines in the US and a partnership with settlement services firm ARC
The ‘safeguarding’ model, launched globally last month alongside a white paper on payments, now provides US airlines with an alternative to ‘holdbacks’, that Paysafe says will improve airline liquidity and reduce costs.
Paysafe said the delay between a traveller buying a ticket and their flight departing has meant that airlines’ merchant acquiring banks consider these payments high-risk and, in many cases, impose significant cash collateral deposits, or ‘holdbacks’, on airlines to offset the risk.
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It says its new model allows airlines to offer travellers an extended choice of payment methods for direct sales, in addition to credit or debit card payments.
The firm said airlines faced “significant financial exposure” even before Covid, and noted that the International Civil Aviation Organization (ICAO) estimates global airline industry losses of $370bn for 2020.
Paulette Rowe, chief executive of Paysafe’s Integrated and Ecommerce Division, said: “It’s been a challenging time for airlines around the world, and, as a specialized payments provider to the travel industry, we understand how hard it is for airlines to have their liquidity tied-up by acquiring banks.
“Our ‘safeguarding’ solution provides an innovative workaround and should really support airlines as they return to growth and emerge from the pandemic.”
Paysafe has also partnered with ARC, which provides settlement services for airline transactions initiated through travel agencies in the US.
The arrangement means ARC’s airlines can use Paysafe’s payments acquiring solution.
Jennifer Watkins, director of payments at ARC, said: “2020 brought unprecedented challenges to the air travel industry, bringing to light the fragility of the relationships between airlines and payment providers.
“These relationships are particularly important for airlines focused on growing their business in the US, since 90% of transactions processed through the ARC settlement system are paid for with a credit or debit card.
“We are thrilled to be working with Paysafe to offer a new and innovative option for payment processing, helping set airlines up for success in the US market.”