Payment methods around the world are diverging and while this is creating complexity, there are also opportunities for travel brands willing to embrace the payments revolution finds a new free report.
An explosion is going on in fintech to cater to travellers and allow them to move money around more easily and pay seamlessly. Technological innovation, alongside cultural preferences, has led to a market where a customer might prefer to pay in cash, credit card, bank transfer, online payment, currency card, e-wallet or mobile app depending on where they hail from. Although this seems like a headache for travel brands, there is value to be mined from adapting to the payments landscape market-by-market according to The Death of Cash in Travel? report, which is free to download now.
The report notes that there are gains to be made from implementing localised payment methods through better conversion rates, improved data gathering, superior engagement, and fraud reduction.
Payments should become another part of a brand’s localization strategy as it makes the consumer more comfortable making the transaction and likely to trust the brand. “The more payment methods you can offer, the more chance there is to convert a customer,” says Jorge Rodriguez, marketing and e-commerce manager at easyHotel.
Daniel Greaves, senior manager, marketing, payments at Amadeus IT gives an example of Latin America, where subscription services are highly popular: “We see it a lot with airlines entering the Latin American market and looking to improve sales. As soon as you implement installments, you will see an improvement in sales because that is how people are used to paying,” says Daniel Greaves, head of marketing for travel payments at Amadeus IT Group, underlining how localization in payment methods can add up
Innovation in payments will become a key differentiator amongst travel businesses, particularly among OTAs, says Edward Chandler, CCO at eNett International. “It will help them to offer bespoke customer experiences and enhance the quality of trips through real-time in-destination offers. For example, you could be on holiday in Rome and receive a discounted offer to buy tickets at the Colosseum,” he says. “One frictionless in-app purchase and you could be straight on the guided tour.”
Thomas Helldorf, VP for Airlines and Travel at Worldpay Helldorff sees this trend in the “The likes of Airbnb and other travel companies moving into the experience world, and starting to mimic that concierge experience you get in a hotel by giving extra recommendations. Instead of paying for a vanilla bed, they're enriching their guest’s experience by offering extra ancillary services around their stay. Removing the payment headache from the booking experience creates loyalty to their brand.”
“This intertwining of payments as part of the loyalty question is going to become deeper as social media companies become more embedded in the scene” says Alex Hadwick, head of Research at EyeforTravel. “Payments are also going to extend as social media companies become involved and machine learning advances allow for superior targeting and ‘contextual commerce’. WeChat Pay, for example is a leader in this. The future could well be contextual adverts based on social media app usage, followed by payment from within the app, meaning your customer could book their vacation in one go seamlessly and then communicate with your company’s chatbot to request their in-stay preferences. This is a way to create a concierge service and reach the consumer but also reduce barriers to conversion.”
However, having too many payment methods can lead to confusion says Peter Quinn, head of payment and revenue services at Eurostar: “Many companies and online merchants are starting to have very cluttered websites with many options of how to pay.” He points to pointing to Lufthansa, which has tabs of different payment methods, from EPS Online to UnionPay, Sofort Banking to Giropay, as well as the major types.
This means brands need to consider their capacity and ability to implement payment methods and work with partners. Paul Van Alfen, global head of airlines and travel at Ingenico ePayments, says: “Yes there is a lot of complexity in travel payments but that is typically where the middle man comes in. The more you move towards mobile, to alternative forms of payments, to local payments in South East Asia, China, Russia and Latin America, it becomes very complex very fast. The volume is relatively low but complexity is exponential.”
“Our selection methods for things like Paypal and also payment methods like Apple Pay, for web, in app and Apple Pay contactless in store, means looking at the impact they’ll have on conversion rates, the ease of use for the customer, the security it provides to customers and ourselves to reduce fraud rates and the cost of processing,” says Quinn.
Helldorff advises brands to “Ensure when you turn on the payment method that all the other parts of the organization are aligned and support that payment method as well. If you get that process right, you can turn on as many methods as needed wherever it makes sense for incremental revenue and a significant incremental reach in a particular market. That justifies the extra effort of adding a payment method.”
Eventually, the payments headache may be solved by payments being aggregated by tech giants. This is the view of Shachar Bialick, founder and chief executive of payments platform Curve. He believes the world of money will eventually consolidate into a powerful payments “operating system” that will aggregate all bank accounts, savings and credit and debit cards under one service. This is what Curve is attempting to do. In his opinion, “It is inevitable that a platform will converge all money into one operating system, one point of access. It could be one of the big tech companies, one of the GAFAs (Google, Apple, Facebook, Amazon), it could be a Paypal or Mastercard or it could be Curve, but it will definitely happen,” he says. However, this is a very long way out currently, so travel brands will need to explore the word of travel payments and prepare for diversity as payment methods explode.
Download this free report now to understand how payments are diverging and how you can take advantage of the new environment as a travel brand through detailed analysis alongside insights from:
- Daniel Greaves | Senior Manager, Marketing, Payments | Amadeus IT
- David Nunn | Head of Braintree Europe
- Richard Cole | Chief Marketing Officer | Caxton FX
- Shachar Bialick | Founder and Chief Executive | Curve
- Jorge Rodriguez | Marketing and E-commerce Manager | easyHotel
- Edward Chandler | CCO | eNett International
- Peter Quinn | Payments and Revenue Systems Lead | Eurostar
- Ian Strafford Taylor | Chief Executive | FairFX
- Paul Van Alfen | Global Head of Airlines and Travel | Ingenico ePayment
- Anouska Ladds | European Head of Airlines, Hotels and OTAs | Mastercard
- Ben Jackson | Director of Mercator Advisory Group’s Pre-paid Advisory | Mercator Advisory Group
- Alex Fitzpatrick | Head of Global Payments | Travelport
- Ovidiu Olea | Founder and Chief Executive | Valoot
- Thomas Helldorf | VP for Airlines and Travel | Worldpay