Regulatory change • By Amon Cohen


card programmes are no exception. However, in March prime minister Theresa May confirmed that UK finan- cial services companies would lose their “passporting” rights to sell across the 28-member bloc. “For issuers with only a UK licence,


they will need to create an entity in other markets, and the reverse will be true if they are Europe-based: they may need to set up a UK licence to con- tinue to trade in the UK,” says Cornelius.


“A hard Brexit could also mean data ring-fencing and


issuers would have to sepa-


rate their data processing, too, because they wouldn’t be able to export data across the border. I recommend you talk to your issuer to see what it is doing because a lot of agree- ments could be affected.” Citi’s Robson says: “We


issue out of an Irish entity and can passport into the EU through that.” He adds that,


IATA ISSUES – RESOLUTION 890 For decades, a rule operated by IATA called Resolution 890 prevented travel agencies from paying an airline with a card in the agency’s own name. As of March, that has changed – up to a point. TMCs and other agencies can now pay with their own cards, but only if they reach specific agreement with the airline to do so. That will be a massive bureaucratic headache and it could see carriers allowing some TMCs to use some cards but not others. “Which TMCs airlines will accept, and which cards will be accepted, will be determined by the merchant fee the airlines have to pay on those cards,” says Paul Spelman,country manager, UK and Ireland, Airplus International. At present, TMCs often settle with airlines instead through IATA’s


when Brexit comes, Citi will be “looking at potentially recontracting and reissuing new cards”.


FOR ISSUERS WITH ONLY A UK LICENCE, THEY WILL NEED TO CREATE AN ENTITY IN OTHER MARKETS, AND THE REVERSE WILL BE TRUE IF THEY ARE EUROPE-BASED


Billing and Settlement Plan (BSP), allow- ing the TMCs, in turn, to accept payment from their corporate clients through a monthly invoice. However, in the UK, the BSP settlement period reduced in June 2016 from monthly to fortnightly, and there is speculation it will shorten again to weekly. If that happens, TMCs could lack the cashflow to accept monthly payment on invoice from their clients. Agent-own card payments to airlines


may potentially allow client invoicing to continue, but Cornelius fears that will be too piecemeal a solution for the reasons explained above. “The question is: will shortened BSP, coupled with limited acceptance of TMCs’ cards, force TMCs to ask all corporate clients to pay for air fares on their own cards?” he asks. Spelman’s view is that agent-own


cards may help but that clients paying through their own lodge card “is much better. There is more visibility of spend because the transactions go on the client’s own account which is free of charge.”


In association with


BBT CORPORATE CARDS SUPPLEMENT 2018


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