Zero losses: An Acquirer’s Strategy During an Airline Collapse
A Partnership with deep experience in Travel Payments
In the dynamic world of air travel, seamless payment processes play a crucial role in enhancing customer experience and driving operational efficiency. From booking flights to onboard purchases, payments are integral to every stage of the journey.
As the leading acquirer for airlines, Worldpay processes payments across 146 countries in 135 currencies, making them a logical payment partner for airline merchants seeking a global provider.
Since April 2021, Worldpay has partnered with actuary.aero to monitor airline merchant risk exposure and enhance collaboration with their airline merchants.
This partnership has enabled Worldpay to provide acquiring services to more merchants and secure larger processing volumes.
Transparency and Risk Management
actuary.aero offers transparency on transaction-level risk exposure and provides mutual visibility of the data for both airline merchants and Worldpay. This allows Worldpay’s Risk team to propose alternative payment conditions that can improve cash flow for their merchants and/or avoid high bank guarantees or deposits. For example, holding funds from transactions not yet flown, whilst immediately releasing and settling amounts for those that are closed. As this can be done on a daily basis, it has a significant impact on the acquirer’s daily operations, especially in high-financial-risk situations.
European Airline Insolvency
Recently, a prominent airline based in Europe faced insolvency, significantly impacting its operations and financial arrangements.
Given their historic financial risk profile, the airline was able to utilize Worldpay as their payment acquirer by integrating actuary.aero as the system to manage and track their financial exposure.
actuary.aero’s payout calculation method was particularly instrumental in this setup, as it facilitated controlled payouts to the airline based on the tickets that were actually flown. This automated system ensured that payments for flown tickets were directly made from an escrow account, providing a seamless and secure transaction process. When the airline declared insolvency, the robust measures implemented by actuary.aero proved crucial in protecting Worldpay from the potential financial impact of unwarranted chargebacks.
This system effectively helped to shield Worldpay from incurring losses due to open exposure, showcasing the reliability and efficiency of actuary.aero’s payout method. As a result, Worldpay emerged without unwarranted financial setbacks, highlighting the importance of having a secure and well-managed financial tracking system in place.
actuary.aero served as a trusted third party, obtaining a comprehensive record of all transactions, chargebacks, and refunds from the acquirer, as well as all booking information from the merchant, including tickets, flight information, rebookings, and vouchers.
With this extensive data, actuary.aero could accurately calculate the current status of bookings and transactions, providing a reliable and transparent overview at a transaction level from the time of booking until the flight was flown. This reliable source of information is crucial during financial audits and legal proceedings.
Enhanced Chargeback Management with actuary.aero
Chargeback management was also enhanced with actuary.aero offering data-driven advice on handling incoming chargebacks.
Chargeback management was also enhanced with actuary.aero offering data-driven advice on handling incoming chargebacks. The platform uses the data provided to accurately identify which chargebacks should be disputed and which are legitimate, streamlining the process and ensuring that only valid claims are processed. This is visible not only in the dashboards but also via a system of triggered alerts that assures the acquirer/merchant’s teams are automatically aware of any claims or major variations that arise.
Immediate access to updated information enabled Worldpay to continuously monitor the insolvent company’s financial position and risks, while real-time chargeback assessments ensured swift, informed decisions. The result? A well-protected acquirer with the ability to navigate the complexities of an airline failure with confidence and mitigate potential losses.
