NAP by Nium: Faster, Cheaper Payments for Air France-KLM
In a significant stride towards modernising airline payments, Nium has joined forces with Air France and KLM to introduce a groundbreaking payment solution. The Nium Airline Payments (NAP) solution is set to transform the airline payment landscape by offering lower payment costs, enhanced optionality, and guaranteed payment acceptance. This partnership addresses longstanding inefficiencies in the travel industry’s payment processes, providing substantial benefits to airlines and travel agents.
A New Era of Payment Efficiency
Announced on 18th June 2024, this collaboration heralds the introduction of “closed loop” electronic payments between Air France, KLM, and selected travel agents. NAP leverages a private network of trusted UATP authorisation rails and bank transfers, presenting a compelling alternative to traditional travel agent card transactions. This innovative system eliminates intermediaries from the payment flow, significantly reducing costs and simplifying reconciliation.
Spencer Hanlon, Global Head of Travel Payments at Nium, articulated the longstanding challenges the travel industry faces: “For decades, the travel industry has been grappling with complex, slow, and expensive payment methods. Nium is helping travel agents and their airline and hotel partners unlock the potential of global real-time payments, transforming the way money moves through the travel ecosystem for the better.”
Enhancing Speed and Efficiency
One of the most striking benefits of the NAP solution is its ability to reduce settlement times drastically. Traditional payment methods often require hours, if not days, to process. In contrast, NAP guarantees payment acceptance and accelerates settlement times to mere minutes or even seconds. This rapid turnaround enhances operational efficiency, boosts conversion rates, and increases profit margins for airlines and travel agents.
John Taylor, Head of Airline Payments at Nium, emphasised the transformative potential of NAP: “We built NAP to create a more equitable and sustainable model between airlines and their agent partners around the world. Payments are no longer the necessary cost of doing business for airlines, but a determining factor in distribution discussions, increasing control and collaboration within the indirect sales channel.”
A Closer Look at the NAP System
The NAP system’s design fosters a direct and transparent commercial relationship between airlines and travel agents. This bilateral agreement, facilitated by Nium, ensures a one-to-one “closed loop” relationship, enhancing trust and operational transparency. By eliminating the need for intermediaries, NAP provides a seamless payment acceptance process, benefiting all parties involved.
The triad of speed, efficiency, and acceptance rates is critical for travel agents. NAP combines these elements on a single platform, optimising the payment acceptance process. This streamlined approach not only improves travel agents’ operational efficiencies but also enhances their profitability.
A Strategic Rollout Across Europe
The initial rollout of NAP will target Air France and KLM’s travel agent network in Italy, with plans to expand to additional European markets shortly. This phased introduction will allow for a smooth transition and ensure that the system is fully integrated before being scaled up.
The collaboration also underscores a shared commitment to complying with industry regulations and laws, ensuring that all transactions remain secure and legally sound. This focus on compliance is critical in an era of increasingly stringent regulatory requirements.
Conclusion: A Bright Future for Airline Payments
The partnership between Nium, Air France, and KLM marks a pivotal moment in the evolution of airline payments. By introducing the NAP solution, these companies set a new standard for payment processing in the travel industry. The promise of lower costs, faster settlement times, and enhanced operational efficiency is poised to revolutionise how airlines and travel agents conduct business.
As this collaboration progresses, it will be fascinating to observe how the NAP solution reshapes the airline industry’s financial dynamics. With its focus on innovation and efficiency, Nium is leading the charge towards a more streamlined, equitable, and profitable future for all stakeholders in the travel ecosystem.
