Asia-Pacific has grown into the world's largest market for cashless transactions. Find out what are the top APMs here.
The travel industry has undergone significant changes in recent years due to the ongoing pandemic and its related restrictions on travel and businesses. These challenges have had a negative impact on many travel companies, both big and small, making it difficult for them to stay afloat. When considering solutions to help the travel industry recover, payments may not immediately come to mind. However, there are various ways in which companies in the travel sector can leverage advancements in payment technology to bounce back from the pandemic, lower expenses and generate new sources of income. Here are some key areas where payments can influence the travel industry.
Table of Contents
The Customer Experience
Providing a smooth customer experience is a standard expectation in today's market. The travel industry can improve its payment process by streamlining the check-out process, which can lead to more completed transactions and fewer abandoned carts. The goal should be to make paying for travel as effortless as buying other goods and services, such as electronics or meals.
Incorporating various payment options such as point-of-sale systems, digital wallets, buy now, pay later and seamless check-out experiences that are compatible with all devices can have a significant impact. Implementing a unified system that allows customers to use multiple forms of payment such as vouchers, loyalty points, and bank transfers can alleviate customer frustrations and reduce drop-outs during the booking process.
Innovative Products
The pandemic has caused many people to become hesitant about travelling due to the unpredictability and disruptions it has caused. Travellers will be looking for assurance if they need to make changes to their travel plans. One way to alleviate this concern is by utilizing innovative payment products that can manage the risk associated with paying in advance for travel that is scheduled for a later date.
One way to mitigate the risk for customers is by implementing buy now, pay later systems, which enables them to make payments over a longer period of time as the trip gets closer. Additionally, incorporating insurance products can provide reassurance to customers and address potential risks. Payment technology can also be used to offer promotions such as "price freeze" to encourage customers to book immediately instead of waiting for potential price drops closer to their departure date.
Loyalty programs
For many years, loyalty programs have been a staple in the travel industry, but they have not adapted to changes in customer behaviour and expectations. Since loyalty points can be considered a form of payment, it is essential to consider the integration of loyalty programs into the overall payment strategy when revamping them.
Loyalty programs should be closely linked with payment options through digital integration. Travel companies can expand their customer base by forming partnerships with banks and other card issuers to offer co-branded loyalty programs. Customers value flexibility and ease of use, and any difficulties in redeeming loyalty rewards can erode trust and decrease customer confidence in the company.
To ensure customer satisfaction, it's crucial to make it easy for customers to view, monitor, and use their loyalty rewards. Collaborations are a vital aspect of loyalty programs, and customers must be able to redeem their rewards through any partner's payment system. For instance, if an airline provides points that can be used at a hotel chain, but the hotel chain's online payment system is not linked to the loyalty points database, it will be frustrating for customers. By implementing efficient loyalty programs, companies can maintain customer loyalty and aid in their recovery.
B2B Payments
Retail payments are just one piece of the puzzle for travel businesses. Another area of opportunity is B2B payments which can help to optimise the systems used by corporate travellers, travel agencies, airlines, hotels, car rental companies, and other travel-related businesses.
Currently, settlement schemes such as the one between airlines and travel agents are not flexible and specific to the industry. By using updated payments technology and integrating platforms it is possible to simplify the settlement process and reduce the time and dissatisfaction for all parties involved in the transaction.
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Decoupled Payments
When payment systems are closely linked with proprietary reservations or property management systems, it often results in inefficiency and challenges in integration or updating. Many hotel chains, airlines and other travel businesses use their systems which have become costly, challenging and inflexible to use. The expenses related to maintaining these systems are substantial, and the cost of modernizing them may be out of reach for many companies. According to a survey, 41% of travel companies stated that the primary source of financial strain is the complexity of managing payment systems.
By separating payments from these systems and working with other travel companies, it becomes easier to provide the seamless payment experiences customers anticipate while also reducing costs. Utilizing a third-party integrated payments ecosystem, for instance, can lower expenses by distributing the overhead across multiple businesses instead of requiring each provider to maintain their system. By having the appropriate partnerships in place to support these ecosystems, the specific needs of the travel industry can be incorporated into the platform, making it beneficial for all parties involved.
Improve Revenue
Introducing new payment technologies can significantly improve the customer experience, but it also has benefits for businesses. By incorporating digital payment tools, companies can have more control over their cash flow and revenue. Implementing options like instalment plans can make travel more accessible and increase sales. Instalment plans have become increasingly popular among consumers and according to a 2021 survey, 56% of respondents reported using this method at least once for a purchase.
In the tourism industry, where tipping is vital, digital tipping solutions that enable consumers to tip staff quickly and securely through a QR code or app using their debit or credit card can offset the impact of a cashless society. Digital technology has been a driving force in the evolution of payments in travel for a long time and embracing it is essential in today's highly competitive market.
Conclusion
In conclusion, innovative payment solutions have had a significant impact on elevating the travel experience. From mobile payments to virtual cards, these advancements have made it easier and more secure for travellers to manage their finances while on the go. These solutions also offer added benefits such as rewards and cashback, making travel more enjoyable and cost-effective. The travel industry is constantly evolving and with the integration of these payment solutions, it is clear that the future of travel is looking brighter than ever.
Are you looking to enhance the overall experience for your guests and potentially increase revenue for your travel business? By incorporating alternative payment methods offered by XanPay into your checkout process, you can offer your customers a wider range of payment options while also reducing transaction fees. Don't miss out on the chance to improve customer satisfaction and boost your revenue.
Contact us today to learn more about how to integrate digital forms of payment for your travel business.
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Asia-Pacific has grown into the world's largest market for cashless transactions. Find out what are the top APMs here.
Asia-Pacific has grown into the world's largest market for cashless transactions. Find out what are the top APMs here.