1st March 2024
Airlines have been looking at ways to the make the most of their association with acquirers, the financial institutions settling and processing payments.
In the context of cross-border payments and expansion of their presence in the international arena, airlines are working on ways to dynamically route transactions (for instance, one acquirer experiences technical issues or downtime or routing depending on factors like transaction volume, currency etc.), and also come to grips with other key aspects like costs (for instance, optimizing the set-up to reduce payment costs, local vs. international set-up etc.) and managing risk. This also strengthens a merchant’s ability to negotiate better terms.
One key initiative has been counting on orchestration to optimise the way an airline can work with multiple acquirers, especially looking at partnerships in specific regions. This matters considering that the payment set up is complex, considering the number of stakeholders involved in the value chain and due to the number of sales channels.
Airlines tend to highlight that large percentages of cash reserves are held by card acquirers, impacting liquidity. It is clear that in case one major acquirer is responsible for an airline’s revenue generation, it carries far more risk, and so will defensibly require greater security. The role of technology and data (e.g. data from the “qualification of downgrade report”, pricing data etc.) is coming to the fore, with acquirers making an astute use of the same to ensure they don’t overexpose themselves. Another expectation is to better understanding the business of each airline and its priorities. Acquirers also focus on transparency on costs and pricing and take responsibility for the payment process.
What to expect in this arena going forward?
Hear from experts at the upcoming #ATPS2024 in London (22-23 May):
https://www.aiconnects.us/atps-2024/
By Ritesh Gupta, Ai Events
