22nd February 2024
Airlines are not only looking at costs associated with payments and cutting down on them, but they are also assessing ways to optimise revenue drivers related to payments.
Edgar, Dunn & Company recommends that airlines must have a precise understanding of the cost of acceptance, and ensure that the distribution and finance departments work in harmony.
Evaluating other areas of preparedness, travel merchants need to be agile when it comes to implementing alternative form of payments, understanding incremental revenue that is coming via these form of payments, and most importantly, balancing the UX vs. security issue.
It is worth evaluating how merchants don’t end up getting impacted by liquidity issues i.e. acquirers holding sizable chunk of cash reserves from merchants until the service is delivered. As for working with acquirers, Elavon urges the airlines to focus on missing data (departure date), downgrade report, pricing data and breakdown, and reconsider routing of transactions. The technology is also playing its part when it comes to working with multiple specialists, like acquirers. The orchestration platforms enable a merchant to opt for the most suitable acquirer for each transaction.
Payment data and experience
It is also vital to dive into data and evaluate how travel shoppers are transacting – payment methods per region, per transaction type; decline rates and why the same is happening; frequency and type (for instance, in case of subscription payments – retention, lifetime value, direct debit etc.); authorization, chargebacks etc. Payment as a discipline can contribute a lot more, including in revenue generation. Analysis can pave the way for dynamic pricing and currency conversion based on the customer’s location and device.
Looking from a consumer’s perspective, there are areas where they seek more transparency, for instance, a desire for more transparent pricing, the option to pay in their preferred currency and also more clarity over FX and related charges. It is time to look at factors that still are of concern to travellers, and how travel merchants and their partners can take care of the same to improve acceptance and the overall conversion rate.
Revenue enabler
As discussed during #ATPSAPAC in Bangkok few months ago, it is time to view “payment as a revenue enabler.”
Are airlines and travel suppliers ready to look at payment as an opportunity – look at P&L target, revenue target, not just as a cost?
Hear from experts at the upcoming #ATPS2024 in London (22-23 May):
https://www.aiconnects.us/atps-2024/
By Ritesh Gupta, Ai Events
