NDC and Airline Distribution: The Impact on Payment Routing

The transition to New Distribution Capability (NDC) is one of the most significant shifts in airline IT infrastructure. For years, airlines relied on legacy Global Distribution Systems (GDS) and EDIFACT standards to distribute their inventory to travel agents.

Direct and Dynamic Offers

NDC allows airlines to bypass legacy restrictions, offering personalized fares, bundle packages, and ancillary items directly to external sellers. However, while the distribution benefits of NDC are widely discussed, the impact on payments and settlement is often overlooked.

With NDC, airlines act as the merchant of record for more transactions. Instead of using traditional GDS billing schemes, payments must be routed directly into the airline’s acquiring bank. This requires sophisticated payment orchestration to route payments based on regional preferences, interchange fees, and currency.

Reconciliation in NDC

Because NDC allows for dynamic bundles (like ticket + baggage + Wi-Fi), payment systems must be able to split and reconcile dynamic amounts. Airlines are now partnering with modern FinTech processors to ensure that NDC ticket purchases are secure and settlement is frictionless.