Customers are now demanding the payments journey when travelling, from booking the travel method to the hotel they’re staying in, to be as simple as booking an Uber to work or a friend’s house. But how exactly can the changes in the payments sector help the travel industry?
Jean-Christophe Lacour is the Head of Merchant Services, Payments at Amadeus, the travel tech company. Lacour has 20 years of broad experience in the payments industry including Amadeus Payments, Visa Europe and Gemalto.
Using his wealth of experience, Lacour breaks down how the payments industry will impact travel:
As the travel industry continues its recovery from the covid-19 pandemic, making payments a strategic differentiator at key moments in the complex travel buying cycle is critical.
Few industries rely on maintaining a continuous buying cycle with the customer as much as travel. Being able to successfully sell add-ons is critical in delivering a successful commercial strategy. As a result of this, the travel industry is transforming its approach to payments with a focus on delivering a frictionless experience at each stage of the customer journey, from booking to destination.
The way we pay for goods and services has changed drastically over the past decade driven by the convenience of mobile, new digital wallet options, contactless payments, QR codes, new approaches to authentication, and alternative payment methods. So much so that 84 per cent of travellers now pay with non-cash methods like contactless or mobile payments when travelling.
These advances are what makes an end-to-end payment experience that adds value to the overall trip experience, for both travel providers and travellers themselves, possible. For the purpose of this article, I have taken a typical air travel journey, from booking through to the airport and journey itself, to identifying the potential stages where innovative digital payments can transform the traveller’s experience.
Payments supporting the initial eCommerce booking
Any travel journey starts with inspiration and research, and this is where payments need to be frictionless. This is what can make the difference between a traveller making a booking or moving to a different provider. Although airlines are making great initial steps through allowing card details to be held on file or alternative payment methods to be used on their website, there is additional value to be found by solving payment pain points proactively throughout the entire trip.
Many travel companies have the traveller’s profile from prior interactions, making personalisation possible. If the traveller is a frequent flyer that has previously paid with a selected credit card, why not give that traveller the choice to make that specific card their default payment option?
Being able to combine miles, cash or vouchers to book a single trip delivers what travellers want and with a simple ‘slider’ airlines can make it easy for travellers to combine different types of funds for a single booking.
Pre-trip: facilitating additional purchases and managing disruption
Covid-19 has highlighted the difficulty of managing large scale disruption, leading to a perfect storm when it came to cancellations and refunds. Digital payment innovation can help automate the disruption management process whilst improving the experience for passengers. For example, when a flight is cancelled the traveller can be issued a digital voucher directly to their digital wallet.
Airlines could also proactively alert travellers when the exchange rate is favourable in advance of their trip. The foreign currency could be purchased from the airline to be spent during the trip, simplifying the FX process and securing a commission for the carrier.
Supporting the transformation of the airport to become a commerce hub
Airlines can look towards companies such as Uber, which has made it extremely easy to pay in a single click. Now, imagine a business traveller who wants to add lounge access at the check-in desk or kiosk. If the traveller has already provided their card on file, then airlines too can offer additional services triggering direct payment.
Travellers can receive notifications to board alongside an offer of an extra legroom seat upgrade, or if the passenger is known to be running late then offering fast track security or speedy boarding is an option. Airlines can also enable travellers to quickly and easily pay for ancillary services without touching a screen by leveraging universal QR code technology at the check-in kiosk or bag drop.
The journey: facilitating the onboard experience and simplifying transfers
Even at 30,000 feet in the sky, travellers want to experience the same frictionless payment experience they would expect on the ground. Planes Wi-Fi-enabled as standard is increasingly a reality. The airline is then in a position to offer their standard digital payment experience including using card-on-file to enable frictionless payments. Even when there is no connectivity, the technology exists to allow travellers to purchase items through their pre-authorised payment method.
At destination: supporting a customised and simplified hotel stay
Just like the air travel part of the journey, travellers have the option to save a payment method with the hotel at check-in or booking. Hotels are shifting to enable digital payments, seeking new options for guests to pay safely and conveniently. This method can then be used to pay for additional services throughout the stay with a single click e.g. booking a spa treatment or evening meal at the hotel via the hotel’s app. Pay-as-you-go in the property is often easier to manage for hoteliers as they’re not taking any risks versus asking their guests to settle their bills at the end of their stay.
Why a frictionless end-to-end payment experience matters
Taking a step back, it is important to look at why this all matters. Frictionless payments both enable a more convenient experience for the traveller throughout the trip, therefore, improving their satisfaction is essential to the industry’s merchandising strategy.
By breaking down silos and considering the journey from beginning to end, payments can become a strategic differentiator, supporting a better experience for travellers and overcoming pain points like complexity, stress, fragmentation and a lack of choice when paying.