19th October, 2021
The travel industry and payment specialists have been evaluating risks associated with B2B travel payments, assessing the role of stakeholders across the value chain and working on a financially viable way out.
Parties have to agree on a solution that not only protects them, but also the traveller.
So what has changed in the past 18 months as far as airlines’ pacts and other initiatives are concerned? Some key points to assess:
- Payment terms with card acquirers: What changes have been brought in terms? How does it vary according to the business model of airlines, for instance, the short and long-haul mix of an airline? How the analysis is shaping up as per the profitability margin of airlines? Impact of fuel cost?
- Routing of a transaction: For cross-border merchants like airlines, how they are going about integrating the right mix of regional and global payment partners (PSPs, acquiring banks) to optimize acceptance rates and other key areas? It is imperative to focus on optimizing the routing of each card transaction and gaining an insight into real-time information on the current acceptance rates for specific PSP or acquirers and the costs associated with each route.
- Cashflow: To what extent have airlines succeeded in implementing a strategy where offered payment methods help in funds being obtained directly by the airline? How are passengers responding to options like bank transfer?
As Trustly points out, online banking payments can offer consumers the digital debit option that stands out for a trusted, familiar authentication method via one’s own bank login. Also from CX and conversion perspective, it improves the shopping experience by integrating customer data at the checkout. According to Worldline’s Eline Blomme, Open Banking is “still only getting started, and future applications could include AI-enabled ‘predictive banking’ that anticipates customer demand ahead of time and intelligent personalised Direct Debits that take into account the customer’s lifestyle”.
- More responsibility: NDC brings a new flow to the industry and one critical aspect is related to being the Merchant of Record. So how the responsibility related to a transaction coming up from an indirect channel is going to shape up for an airline must be delved into.
An incompetent digital payment strategy can impact a brand in a striking way considering the way digital commerce has shaped up in the last 18 months or so.
Ritesh Gupta
Ai Team
