Travel merchants need to support payment methods that customers value and prefer. Aspects like contactless payments or letting one being in control of a transaction are of paramount importance, writes Ai’s Ritesh Gupta.
9th June, 2021
The surge in buy now pay later (BNPL) option for transactions has stood out in the recent past, and travel companies, like retailers from other categories, have already responded by activating flexible payment feature on their digital assets.
BNPL players are expanding their operations across the globe, coming up with new products and going deeper into the lives of shoppers, for instance, rewarding shoppers for their loyalty. These fintech specialists assert that they are lending fairly and responsibly. This is being backed by machine learning that enables them to make smart, ongoing adjustments to their credit models that let people to spend in a way that’s responsible and wise.
Monthly instalment payments are driving what is seemingly quite an “aggressive” recovery in the travel industry, said Rob Borden, VP Commercial, Uplift, during Ai’s webinar this week.
Borden added that people are ready to travel. Installments are hit in several segments, including the vacation package space, airlines etc. “Also, average transaction value goes considerably (with this payment option),” said Borden.
In travel, BNPL players are looking at ways to let shoppers design a holiday and payment cycle that suits their budget. As shared by Afterpay in an interview with Ai in the past, consumers can select to pay with periodical installments which are automatic and interest free. The holiday is then paid off by the time they depart, meaning they avoid coming back from their holiday with a debt-lag.
Favoured not just by GenZ or Millennials
Sophia Melas, Head of Partnerships, Fly Now Pay Later, said it is a misconception that the buy now pay later (BNPL) option is only for the younger audience, say GenZ or Millennials. But rather it could be used by a booker who is pricing conscious and also one who is keen on buying additional products (baggage or any other ancillary). “Flexibility with pricing is important and merchants must focus on crating awareness about this option more during the buying flow,” she said.
With BNPL, there is a certain “comfort” and when you are comfortable, you tend to use it more often, said PayPal’s Todd Royer. He added there are no reconciliation issues. “Not that a big of a challenge,” he said. The company’s offering, Pay in 4, also appears in the customer’s PayPal wallet, so they can manage their payments in the PayPal app.
He added that merchants must avoid any sort of complexity in the booking flow and must keep UX simple for a superlative payment experience. For instance, avoiding cumbersome data-entry or not being to login in one touch.
“QR (Quick Response) Codes are becoming ubiquitous in our lives, for instance, in the grocery store, restaurants (plus interesting use cases like in the vaccination ) etc.,” said Seth Friedman, Head of Payments Partnerships, CITCON, who highlighted that it is extremely simple to use. For travel companies, this tool should be considered for a quick interaction with a traveller, for instance, offering information on finger tips, instant offers etc.
The panel in the webinar also discussed barriers to cryptocurrency as far as adoption by merchants for payments is concerned. “A lack of understanding could be the reason,” said Friedman, who added that there is a rise in interest among merchants.
A poll conducted during the webinar regarding barrier to cryptocurrencies also indicated that there is a lack of understanding (51%), followed by price volatility (26%) and regulatory concerns (21%).
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