5th Feburary 2024
How non-financial companies like travel merchants are integrating banking, payments, and other financial services?
One of the most relevant offerings for the travel sector is embedded payments, where the focus is on accepting users’ payments within their platform. So travel shoppers wrap up their transactions without leaving the platform’s website or mobile app, facilitating a convenient checkout experience.
A major consideration when it comes to making it work is looking beyond the plug-and-play option, rather being in the control of the entire payment experience. The objective is not to go for a quicker implementation or a restricted customisation, but actually evaluate and cater to a travel shopper’s needs. This would encompass intuitive integration, efficient on-boarding, white-labelling, reporting capabilities, pricing etc.
According to Payrix, the three types of embedded payments include:
- Referral partnerships
- Payment facilitation
- Payment facilitation-as-a-Service (PayFac-as-a-Service)
Stripe explains that one option is to integrate a payment gateway or processor into the platform, allowing for seamless transactions within the platform. The platform becomes, in essence, a payment facilitator. But this involves considerable costs. A viable alternative can be opting for a payment facilitator as a service. There is no need to set up and maintain the requisite infrastructure. As for compliance, companies like Stripe state that requirements for payments facilitation vary significantly by country, business model and transaction type. These partners manage the complexity of compliance, licensing and card network rules. There is also a need to understand how embedded payments are being monetised – fee for transactions, subscriptions, data etc.
In its prediction for 2024, the team at Payrix states the key going forward is to the pave way for “integration of preferred payment acceptance methods”, omnichannel capabilities, astute security, and levels of control over the customer experience, with dedicated customer support.
How should travel merchants gear up for embedded payments?
By Ritesh Gupta, Ai Events
