Ai Editorial: Gearing up for a spate of 3rd party mobile wallets

Ai Editorial: A mobile wallet is capable of addressing challenges related to the cost of payment, merchant fraud liability and the speed of checkout. Ai’s Ritesh Gupta assesses how airlines can embrace such emerging option smoothly
First Published 8th February 2016

The task of dealing with emerging payment options can’t be ignored. For instance, Apple Pay’s issuer total is already beyond 825 or so. As concerns pertaining to whether transactions via this mode are sizable enough or not get reduced, the focus is on ascertaining how to make the most of mobile wallets’  simplicity/ user experience or role in the booking funnel.

Airlines have to work out a way to handle proprietary functions and features of each of emerging mobile wallets, and this is in addition to existing multiple payment methods as well as sales channels.  

As a specialist, Denmark-based Vivek Bhatnagar, VP Presales and Solution Architecture, CellPoint Mobile points out that the primary challenge for airlines is to understand that there is no unified approach to improving or prioritizing the complex, costly and constantly changing payments ecosystem, and that challenge exists for any merchant or retailer. He says no single payments vendor can solve the complex jigsaw puzzle with a comprehensive solution.

Being ready

Whenever a new payment method like Apple Pay, Android Pay or Samsung Pay launches an airline or a merchant needs to talk to their PSP or acquirer to support the same and the foresaid payment method may or may not be the immediate priority of the PSP or acquirer. However, if the airline has its own payment layer then it can connect to the PSP which supports the payment method or even connect to the acquirer that supports the payment method directly.

As a result, as Bhatnagar also asserts, it’s imperative for airlines to have a thin but feature-rich and agile payments layer within the enterprise that can talk to or integrate with best-in-class external solutions.

With that flexible framework in place, airlines can enable easy on-boarding, omni-channel payments, multiple PSP/acquirer connectivity, independently stored PSP payments, APM aggregation and improved acceptance rates.   

“Each of this features give the airline the agility that is required to increase and protect revenue in the new digital age where the battle will be fought on speed and service. For example, markets like Singapore/ China where Android is the prevalent Mobile OS, having Android Pay and omni channel responsive UI experience  will be the make or break decision with regards to the success of your mobile payment strategy,”  says Bhatnagar.

Fragmentation in mobile payments

Apple Pay, Android Pay and other alternate mobile payment methods are expected to pose a major challenge to PayPal. Even though there have been discussions around how a new entrant can enter the transaction pie that features the merchant, issuer, acquirer and the card scheme, value is being created for the consumer.

Ultimately, the mobile payments ecosystem is going to be very fragmented, and this fragmentation is a reality that airlines must embrace and support in order to provide a wider range of solutions that customers will most easily adopt.

Bhatnagar says merchants need to take control of their payment ecosystem by owning their own payments layer that can deal with the fragmentation. 

“Having a thin agile payments layer will give merchants the flexibility to tap into various sources using similar technologies like XML,” says Bhatnagar.

This provides merchants with an insulation layer from the complex dependencies of supporting different mobile operating systems and payment mechanisms from multiple external providers.

According to specialists, in practice, merchants with their own payments layer have a distinct advantage over those relying on external providers as they are able to rapidly adopt new mobile payment methods, and develop the perfect cocktail of payment methods and providers that matches the needs of their customers and the markets they operate in.

From customer experience perspective, omni-channel enablement is what can make or and break a sale. Airlines must provide seamless booking and payment experiences across all channels to match passengers’ behavior. For example, a traveller might search for a fare on a laptop at work, compare options on a smartphone on the way home, and purchase a ticket on a table at home that evening. Omni-channel enablement makes that three-stage process a smooth one.

eWallets were invariably part of retail giants, such as Alipay (Alibaba) and PayPal (eBay).

But now the space is evolving, with bank and network wallets emerging (Visa Checkout, MasterPass and ChasePay).

Bhatnagar acknowledges that VISA, MasterCard, Amex and Chase are all getting into the e-wallet space. 

He says, “The idea is to offer ease of payment and bring about  one-click payment readiness to the payment process. Businesses like VISA and MasterCard want merchants to continue to visibly use their brands in the new era of payments and are therefore aligning with e-wallets.”

Talking of Apple, Samsung and Google, these organizations are trying to step up customer ‘stickiness’ by integrating their technology into their consumers’ everyday lives. What should airlines take note of with reference to Apple Pay, Samsung Pay and Android Pay? And what should airlines avoid as far as these applications are concerned?

“Airlines are primarily merchants and they should  ‘endeavor to embrace’  and adopt a nimble, agile but reliable payments platform that enables a suite of solutions,” recommended Bhatnagar. 

The good news is most of the streamlining has been done by the providers themselves, an approach that eases issues with traditional payments.  “In our experience, a stored payment solution, when implemented with mobile-based APMs such as Apple Pay and Android Pay, can bring in considerable  incremental sales via the respective mobile apps,” shared Bhatnagar.

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