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Settlement service for Orders program is a step towards a streamlined and efficient settlement solution based on orders. It will simplify money collection based on two main pillars – the Order data and the Clearance and Settlement Standards.

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What?

Clearance and Settlement Standards is a data communication standard that facilitates the financial clearing and accounting requirements defined within a legal framework that includes the agreed Order. Based on a sales agreement and commitment to pay between two parties, the funds clearing can be initiated by a simple request for clearance with minimal data.

For the fund clearing to be in compliance with regulatory requirements the overall Order data is required as well. Therefore, the Settlement service for Orders program delivers the means to receive and process Clearance and Order data. Moreover, to reduce the settlement risk the program incorporates active risk management tracking for each transaction, from payment to settlement.

Why?

This will provide retailers and suppliers with complete framework from distribution to settlement and accounting of payables and receivables, without the complexity of the ticket-based legacy. It complements NDC regardless of the documents issued and delivers native solutions for ticketless carriers. 

 

Who will benefit and how?

Airlines, travel agents, online travel agents, travel management companies, or any actor involved in the retailing of travel products and services will benefit from: 

  • Streamlined and efficient settlement solution for NDC
  • Automated exchange of settlement data
  • Fully automated reconciliation
  • Fast and accurate cash visibility

See the latest certified companies for the Airline Retailing Settle Capability in the Airline Retailing Maturity Index Registry.

Interested in joining the pilots?

IATA is developing Clearance Manager, a new platform to manage settlement of transactions.

If you are interested in becoming a launch partner for the IATA Clearance Manager, please contact us at SwO@iata.org

Documentation

  • InFocus – Clearance Manager

Media and Multimedia

  • Clearance and Settlement Standards  – What did a Travel Agent say about it?
    ClickTravel at the Implementers Forum - 02 December 2022

 

  • The Clearance and Settlement Standards workflow experience

  • Testimonials gathered at the World Financial Symposium 2019

 

Clearance and Settlement Standard is crossing over different IATA governing bodies:

Visit the Developer portal for further information.

The IATA Clearance Manager will offer a service that will support the introduction of Settlement service for Orders program for airlines and sellers such as travel agents and OTA. It allows airlines to: 

  • Leverage their NDC APIs to drive the collection and accounting of receivables and payables.
  • Reduce the complexity of their NDC implementation for settlement and accounting integration.

About

 

The program will deliver the foundation of the future process for clearing funds from Orders. This includes:

  • Order and Order Changes reporting to provide the required regulatory compliance data
  • API platform based on the lean XML data exchange Clearance and Settlement Standards
  • Transaction authorization process with Track ID for all transactions subject to the IATA Clearance Manager processing
  • IATA Clearance Manager will receive, validate and process all clearances

It will enable the settlement of Orders regardless of whether they are within the IATA Billing and Settlement Plan governance or not.

For remittance and settlement, the IATA Clearance Manager will rely on the simple claim message initiating the clearing of the pre-agreed payment amount between two parties of an order. The claim is followed by an immediate notification to the other party. Based on a schedule, IATA will aggregate and net all claims and inform the parties of their position with a notification.

Extension of order usage

 

Airlines and sellers will benefit from a full order-based distribution framework all along the value chain from distribution to settlement and accounting of payables and receivables, without the complexity of the ticket-based processes for settlement. It complements NDC and Modern Airline Retailing benefits, regardless of whether tickets/EMDs are issued in the background or not, which means it is also applicable to ticketless carriers and as such bridging the gap for ticketless carrier settlement.

Benefits for Airlines and Sellers

 

  • Automated reconciliation.
  • Better cash flow forecasting and liquidity visibility
  • Seamless integration between Distribution and Finance

How does it work?

 

  • Step 1: Just before the airline is ready to confirm the payment commitment to the seller it sends an authorization request to IATA Risk Manager.
  • Step 2: Airline receives authorization response from IATA Risk Manager with TrackID and Based on the response the airline decides either to confirm the payment commitment and what form of payment to use.
  • Step 3: If the payment commitment between the carrier and the seller is for a form of payment handled by the IATA Clearance Manager, the carrier provides a clearance request to the IATA Clearance Manager. The carrier in return receives a response and the seller receives a notification.  
  • Step 4: At the agreed time as per the IATA Clearance Manager Schedule (i.e. BSP Calendar), after the consolidation of all clearance requests received for the period, the IATA Clearance Manager informs the distribution partners about their consolidated net positions by sending Clearing Notifications messages to Remittance Payers and Settlement Payees.  
  • Step 5: Based on the outcome of Step 4, the payer will remit the funds to IATA and IATA will settle the funds to the payee.