Elevating the Airline Industry as the World Model for Fraud Prevention
Airlines pay approximately US $7 billion a year to collect payment for their sales. Most of this amount represents the cost of collecting card payments. In addition, airline card sales are exposed to fraud which is estimated at close to US $1 billion per year.
The Payment Method Working Group (PMWG), one of IATA Financial Committee’s (FinCom) reporting groups, has been tasked with the objective of tackling industry-wide fraud.
As a result, the Industry Fraud Prevention (IFP) project has been designed to better assess airline fraud risk in the areas of card payments, frequent flyer programs, and cyber fraud. The first phase of the project has focused on the "Card-Not-Present" (CNP) aspects of the airlines' direct sales transactions and some basic activities in the area of frequent flyer programs.
Industry Partners together to implement
Common Solutions in order to
How did it start?
In 2015, IATA surveyed or interviewed 44 airlines to understand the risk of Payment Fraud related to airlines' direct sales for the specific "Card-Not-Present" aspects with the associated cyber/IT issues. The results have been presented to the Financial Committee (FinCom), an airline working group composed of the CFOs from IATA Member Airlines.
The outcome & recommendations have been endorsed and the strategic areas for action have been identified.
In 2016, the Industry Fraud Prevention project (IFP) is laying the foundation of Fraud Prevention at Industry level. The project aims to establish best practices and set standards for the Industry in order to support fraud prevention, detection and loss reduction. Furthermore it will provide the means to build multi-disciplinary fraud knowledge and experience at the industry level through education and benchmarking in order to improve industry performance.
Another strategic area is about engaging card schemes and large issuing banks for collaboration, and developing partnerships with service providers in fraud detection and prevention. The project will allow strengthening the communication and cooperation within the payment supply chain in a flexible manner, taking market specifics into account while supporting the implementation of common anti-fraud solutions.
For 2017 and onwards: IFP will expand to Fraud Management, becoming operational within IATA.