" class="no-js "lang="en-US"> Paysafe and ARC Partner to Deliver Innovative Payments Solution for Airlines
Friday, March 29, 2024

Paysafe and ARC Partner to Deliver Innovative Payments Solution for Airlines

Paysafe, a leading specialized payments platform, today announced a new payments ‘safeguarding’ acquiring model for airlines in the U.S. and a partnership with ARC, the Virginia-based provider of settlement services for airline transactions initiated through travel agencies in the U.S. and global data solutions. The arrangement sees Paysafe offer ARC’s airlines a payments acquiring solution that gives them financial flexibility by innovating on the traditional approach of tying-up the airlines’ liquidity with their banks to cover risk, which has proven increasingly challenging during the COVID-19 pandemic.

Even before the tailwinds of COVID-19, which the International Civil Aviation Organization (ICAO) estimates resulted in global airline industry losses of $370bn for 2020, airlines faced significant financial exposure. The delay between a traveler 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.

Now, as ARC’s network of over 200 airlines navigate the post-pandemic return of air travel, Paysafe’s ‘safeguarding’ acquiring model provides them with an alternative to holdbacks that improves airline liquidity and reduces their overall costs. Launched globally last month (see white paper for more details) and already successfully used by European carriers such as Norwegian Air Shuttle, Paysafe’s solution will see  airline ticket payments held by a third-party financial institution before releasing them immediately and in full to the airline according to pre-agreed terms.

Paysafe also allows airlines to offer travelers an extended choice of payment methods for direct sales. In addition to credit or debit card payments processed through Paysafe’s leading payment gateway, travelers can also pay using the Paysafecash eCash solution as well as more than 100 other alternative payment methods, all protected from chargebacks.

Paulette Rowe, CEO of the Integrated and Ecommerce Division (IES) at Paysafe, 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.”

Jennifer Watkins, Director, Payments at ARC, commented: “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 U.S., 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 U.S. market.”

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