1st October, 2020
Travel merchants are looking at rolling out new payment methods quickly and seamlessly as they assess ways to support immediate recovery.
Increasing the number of payment methods emerged as the top priority (43%), as indicated by the audience during a poll conducted during the #ATPS Pre-event Workshop on Alternative Forms of Payment, featuring executives from UATP, Trustly and Fly Now Pay Later. Other priorities were as follows - modernizing payment systems (30%) and to accept payments internationally (22%).
This approach is expected to help travel companies keep pace with latest advancements in this sector, as payments will likely continue to be a very hot and competitive sector for fintech investment. Also, with more options, merchants can only improve upon the CX and step up their conversion rate. Initiatives, led by investors, in this sector have already underlined the growing importance of APIs and open data.
As for the payment challenges at this juncture, an increase in “chargebacks/ refunds” was listed as the top issue (74%).
Interestingly, in a poll for how travelers will pay post-Covid, installments (43%) and mobile wallets (36%) came out as the top two options. The growth in installment payments has accelerated during the pandemic. The likes of airlines, hotels, OTAs etc. are considering this form of payment to be a key tool in their recovery. In case of mobile wallets, they are also expected to gain popularity because both merchants and consumers deem touch-free mobile payment as a safer and secure option.
Opportunity to improve not only improve infrastructure but also CX
Travel merchants must look at accelerating certain initiatives post diligent evaluation considering that they are trying to match revenue generation with cost being incurred to run operations.
Simon Eve, Head of Sales, Trustly, a panelist, asserted that it is an apt period for airlines and other travel players to balance their respective payment infrastructure when it comes to mitigating risk and evaluate better handling of chargebacks with alternative payment methods such as enabling travel shoppers to make fast and secure payments directly from their online banking accounts, without going through the card networks. Expanding on the same, Loee Matousek, VP Sales, Trustly referred to ease of use and cost reduction from a shoppers’ perspective along with key aspects such as guaranteed payment and saving money on a transaction for a merchant to embrace such payment option.
The travel sector struggled with the issue of refunds and chargebacks this year, but payment technology specialists highlight that there are ways to eradicate certain painpoints. And one way is to embrace alternate payment options that can resolve the issue amicably, right from offering a relevant choice to communicating properly to streamlining the refund process.
Acknowledging the same, Sophia Melas, Head of Germany, Fly Now Pay Late, said, “We have robust communication tools in place, dedicated to the travel industry. We facilitate communication between airlines and customers.” She added, “Our refund is as simple as the payment acceptance process.”
These players are also working on plans to improve their product that can help in stepping up the average booking value.
Another notable aspect is their expansion plans. Trustly has already announced that it is expanding its offering to Australia and Canada, going beyond existing coverage in Europe and the US. For its part, Fly Now Pay Later raised €39 million, and is too gearing up for expansion.
All of this means airlines and other travel companies are rightly chosen to expand their payment mix and along with it placing themselves in a position to eradicate common painpoints for coming out stronger from this precarious situation.
By Ritesh Gupta
Ai Editorial Team
Join experts and explore new trends in payments and fraud at Ai’s Airline & Travel Payment Summit - #ATPS Virtual Conference 2020:
Dates: 20 - 22 Oct 2020