The Death of Cash in Travel? report, which you can download for free here now. To give you a flavour of the report, the following is the introduction from the report ...
The next billion consumers who will become regular leisure travelers will look different to those in established travel markets in the West today. They will come from mobile-first societies where the digital environment has evolved in a different way. This means they will bring with them new payment methods that travel brands will need to adapt to.
Mobile wallets are already hugely popular in countries such as China, India, Indonesia, and Kenya. In China, many consumers keep their plastic on hand solely for when they travel, instead using apps linked into the social sphere, such as WeChat Pay and AliPay, when they are spending at home. And that spending is soaring, already reaching into the trillions in dollar terms. Brands that can tap into the Chinese app space and allow payment through these giants are giving themselves a competitive edge in the world’s largest travel market.
Innovation isn’t just restricted to high growth economies in Asia-Pacific. Mobile wallets are gaining traction in the West, as are currency cards controlled from apps that make a compelling case to consumers through far lower fees and charges than traditional bank cards. Sweden is already a largely cashless society, and it is even asking the question of whether it needs to slow down in its transition away from cash.
So, is cash in terminal decline? Well, not quite. It will remain popular for many years to come and many pre-loaded currency card operators find travelers largely use them abroad to withdraw cash sums than to use them directly for payments. Geography is critical in the trajectory of cash and local preferences are key. Whilst some developing countries are sprinting ahead with digital payments, others are almost exclusively cash-based. In developed countries, ingrained behaviors and infrastructures are also supporting cash. Germans remain highly wedded to physical currency, carrying more than anyone else in Europe, for example, and this will take a long time to change. Cash has a feeling of security and trust for travelers that is hard to replace and is undeniably useful in a wide number of destinations.
Nonetheless, the growing range of cash alternatives adds up to a more diverse payments landscape than anything that has come before and travel brands can reap the rewards from plugging in. Consumers are more likely to spend when they feel comfortable and secure in their purchase, which can be aided by localized payment formats. Introducing seamless payment methods will induce more consumer spending and travel brands that can adopt these methods successfully can help to reduce that most stubborn of e-commerce issues – purchase abandonment – as well as create a more inclusive brand experience that is embedded into social media applications.
There are other advantages as well, with newer payment methods and CRM systems richer data streams are possible that can allow operational decisions in real time. There is also potential to reduce fraud through more sophisticated authentication. However, there is also the risk of additional complexity and travel brands will need to consider their customer make-up and ability to adopt new payment methods rather than rush headlong into adopting a new medium.
So, please read on and discover how and where the payment environment is changing and we hope you enjoy this piece of EyeforTravel research.
Alex HadwickHead of Research, EyeforTravel