What is Billing and Settlement Plan? Definition and Meaning | Ikajo Glossary


Billing and Settlement Plan

BSP (Billing and Settlement Plan) is a universal settlement system that replaces individual schemes of relations between agents and carriers. It is designed for the effective interaction of participants through the consolidation of information and financial flows. The advantage of the BSP is the work with the electronic ticket of the standard sample.

Nowadays, more than a hundred countries are using the BSP system in order to simplify settlements.

A distinctive feature is the use of the single ticket by all member countries. The presence of a magnetic tape in such a document allows people to avoid a hassle when working with paper documents. The introduction of a magnetic mechanism facilitates the work of airlines and eliminates the inconvenience of passengers.

The mechanism of the BSP system

At the first stage, the connection to the Agents system is made. Before carrying out this procedure, the airline must be checked for compliance with financial criteria and requirements, which must be confirmed by relevant documents. All employees must be aware of the company’s entry into the system and they are required to review the regulatory materials.

At the next stage, the contract is signed, and the agent receives a ticket issuance.

During the third stage, the system is introduced and the cycle is launched, during which the payment is made monthly, and each month is divided into 4 parts.

The next stages are associated with agent training and the introduction of a settlement system.

For airlines, there several benefits including:

  • spending less time when dealing with paperwork;
  • facilitation of the ticket processing technology;
  • convenience (the existence of a single ticket for all participating companies);
  • no need to provide sales reports, due to the fact that all reports are generated automatically;
  • providing an automated procurement procedure;
  • control softness over the use of ticket forms and reducing the cost of their registration.

The system offers airlines and other agents a modern and technologically advanced way for selling tickets. This way of providing services significantly reduces the cost of the airline. Moreover, there are numerous positive moments for the client, in particular:

  • simplified ticket purchase procedure;
  • high level of professionalism of the company that allows the client to be confident;
  • security and the right of legal support if there are any problems related to the purchase of a single BSP system ticket.

So, the main feature of the settlement systems in the market is the use of common standard ticket forms. When the BSP system is operating in the country, the airlines participating in the BSP system stop selling their services through an agent network with their own transportation documents.

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