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
