The Institute of Travel Management (ITM) has launched a campaign calling for industry collaboration in establishing consistent guidance for travel buyers on the significant implications of the EU’s new Payment Services Directive (PSD2).
ITM’s Industry Affairs Committee has established a taskforce to bring together corporate card issuers, TMCs and technology suppliers to provide unified information after buyer members revealed that they are facing a minefield of conflicting advice on which booking types and card products require Strong Customer Authentication (SCA). The taskforce is working on a range of initiatives, first of which will be a PSD2 webinar on March 9th when travel buyers can seek transparency and simplified answers from a panel of relevant stakeholders. Outcomes from the session will be shared with ITM’s supplier members in a Buyer Insight webinar on March 11th.
Despite Brexit, the EU directive regulating payment services and payment service providers will still be applicable in the UK from September 2021. SCA is a new set of rules that changes how cardholders need to confirm their identity when making online purchases to help protect them from fraud. Cardholders booking travel online will often need to undertake an extra step in the check-out process requiring them to verify their identity, typically via a one-time-password (OTP) delivered by SMS, phone or email.
Whilst SCA is straightforward for consumers booking personal leisure travel, ITM’s buyer members have identified copious concerns about the practical implications of SCA in a corporate travel environment. These include questions as to whether GDS, OBT or other aggregator bookings (including NDC) are in scope when transacted via a company credit card. Some buyers have been told that if a booking is made by a TMC consultant directly connected to the GDS, then the booking is out of scope; but if the corporate’s booker or traveller makes the booking via an OBT, then SCA will be required. Other buyers have been told that every single online booking is in scope regardless of source.
The SCA verification process also presents challenges for corporate travellers, where bookings are made by a PA or travel booker. During the booking process, the traveller could be contacted directly to complete second level verification via their mobile phone, and they will need to be available to pass this detail on to the PA/travel booker in order to complete the process and secure the reservation.
Buyers have also expressed concern around the practicalities of using lodge cards or virtual payments as a viable solution to PSD2 due to challenges in managing flexible rates, reconciling lodge cards to different cost centres, and use for bookings other than air.
“Obviously we fully understand the need to tackle credit card fraud, but PSD2 presents unique complexities in the business travel sector and buyers are facing huge discrepancies in the information they are receiving from stakeholders regarding what will be required when the directive is enforced later this year,” commented Scott Davies, CEO, ITM.
“The need for a holistic approach and consistent messaging is paramount. Hence ITM’s Industry Affairs Committee is taking a central role in uniting TMCs, OBTs, and card suppliers to help our members understand the directive, how it will impact them and what steps they need to be taking now to be ready for its enforcement,” he said.