Resolving OTA-specific payment challenges - AiConnects.us
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Resolving OTA-specific payment challenges

Ai Editorial

The #ATPS B2B Payments Pre-event session witnessed interesting discussion around several topics including use of cards, the growth of indirect channel and bankruptcy risk.

 

25th February, 2021

 

How can OTAs sustain their cash flow? How can they meet regulatory changes, for instance, SCA –related one in Europe? How is the battle for bookings via direct.com vs. OTA expected to shape up? What about consumer protection, say when a shopper books multiple flights and airlines haven’t signed an interlining agreement?

These and many more interesting topics were discussed during the #ATPS B2B Payments Pre-event session today. The panel featured:

Damian Alonso, Head of Payer Services – B2B Payments at Amadeus
Clive Cornelius, Head of Travel segment, Visa Business Solutions Europe
Gordon Mitchell, Enterprise Account Director at Modulr

Moderated by: Pascal Burg, Director at Edgar, Dunn & Company

 Use of cards

As per one of the polls – will cards (e. g. virtual cards used by OTAs) increase their penetration of “intermediary to travel supplier” flows in 2021? – conducted during the session, 54% of the audience indicated card penetration, whereas 25% mentioned it will stay the same. And the remainder voted for a decrease in card penetration.

Considering the current scenario, it is being felt that travel merchants are likely to opt for virtual card payments as they facilitate reliable and near-instant cashflow. This is one of the major concerns at this juncture. For an airline, it provides protection against default. So if travel agency were to default on the payment, the airline would still receive the funds.

OTA vs. direct.com

Interestingly, as per the poll regarding will indirect sales grow faster than direct sales in 2021, the participants indicated that 53% will grow faster. 23% voted in favour of the indirect channel. 23% indicated that both will grow at the same rate.

For their panelists stated that there are multiple variables that are going to come into play and the answer to direct vs. indirect won’t be a straightforward. In fact, another study few months ago indicated that the indirect channel is set to benefit. As for variables, the experience of the traveler with regards to refunds, local vs. foreign bookings etc. are going to play a major role in the booking mix.

Bankruptcy risk

The third poll during the session was about bankruptcy risk across the value chain, and 77% voted in favour of incremental changes (e. g. better use of data to monitor risk). 18% voted for greater use of virtual cards.

By Ritesh Gupta,
Ai Team

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