Moving Travel Payments Into The Digital Age

In the 21st century, for businesses across many verticals, disruption comes at the speed of digital. That’s especially true of the travel industry, where a “mobile-first” mentality and the emergence of online marketplaces has increasingly brought an omnichannel experience to researching, booking and paying for trips.

For hospitality and travel companies, a key challenge amid the ongoing shift to the digital realm has been how to replicate the high levels of service and convenience of what have traditionally been face-to-face or phone-based transactions (with travel agents or conference managers, for example).

In an interview with Karen Webster, Eric Liebman, global head of travel at Ingenico ePayments, said, “If you think about travel, no matter what segment you are in, it’s all about service. The challenge has been taking these legacy businesses that have existed for years — in some cases, hundreds of years. How do you translate that level of service when you’re no longer physically connected to a customer?”

As he told Webster, “I don’t think we’re quite there yet.”

The actual nuts and bolts of travel — the planning, booking and paying — are now tied less to individual hotel and airline brands than to experiences, Liebman explained.

The consumer who wants to book a trip to Paris is unlikely to take a piecemeal approach by, say, visiting an airline’s site first and a hotel site second, then moving to a tour site to schedule individual activities. With the rise of travel aggregators, the expectation is increasingly that all options should be available in one place.

The Tech — And Data — Component

As Liebman explained, the whole crux of using an app is about intimacy. For the companies on the other side of the interactions with consumers, the challenge lies in fostering a sense of intimacy through technology.

Examples of how to get there abound in other settings beyond the travel realm — such as with the Amazon Echo, which has become an indispensable hub of technology and service for many a household, Liebman said.

“Mobile devices and mobile experiences for travel planning need to get to the point of relevance and indispensability,” he said, where the device “knows what I want to do. It’s ahead of me, and helping me — and it’s cool and fun.”

For the companies and brands that serve the travelers (airlines and online travel agents, for example), as well as leverage apps and mobile services, the goal is to drive affinity. One way to cement that affinity comes through Big Data, he said, which can foster a personalized experience for end users.

Liebman noted the wealth of data out there about consumers across certain demographics (say, a 40-year-old male who lives in a particular state, and travels with frequency during a certain time of year), where firms can offer tailored suggestions that take travel preferences — a particular hotel chain, for example — into account.

The Payments Component: Beyond The ‘Fab Four’

As to where payments — done well — fit into the equation, payments can be a glue that cements that sought-after affinity. Liebman remarked that payments are increasingly coming into focus for travel firms that are building out dedicated payment departments. Ingenico and other companies, he said, “are evangelizing the need for a customer-driven payments strategy,” especially as cross-border payments gain traction.

A customer-focused payments strategy, he noted, includes the “Fab Four” card networks: Visa, Mastercard, American Express and Discover, of course. However, it also extends to hundreds of alternative payment types that populate the globe. Consumers win when they get to pay in their preferred currencies, and merchants win as they see higher conversion rates, he said.

Fostering flexibility and diversity across payment options can also improve business-to-business (B2B) payments within the travel space, Liebman added, describing transactions across the supply chain, typically done via paper check, as a “huge and untapped area.”

After all, hotels must pay suppliers, commissions to travel agents and other types of fees, which can well be international in scope — and, thus, become complex across currencies and conversion rates. He noted products on offer through his firm — such as TravelHub, which connects travel companies to Ingenico’s end-to-end payment processing capabilities — that allow payors and payees to send and receive funds in their respective currencies with transparency, and without the clunkiness of managing foreign exchange.

Regardless of whether the payments are consumer-facing or business-facing, Liebman said one significant challenge lies with updating firms’ back-end systems so that they can handle and process retail or bank transfer transactions in a manner that is no different from the way they would process credit card payments.

Closing The Gap

To close the gap between customer browsing and closing the sale, and to prepare for the decade that has just dawned, travel firms must create payment strategies focused around the end customer. In addition, it is crucial for travel firms to strike up relationships with other companies that provide complementary, value-added services.

Within the travel ecosystem, he said, “there’s a fine line between vendor and partner” — and the latter is more valuable than the former. Partners can help navigate card scheme regulations, government regulations and local regulations, all of which can be in flux, especially across global markets.

“Find the experts, and leverage all you can in terms of their technology, innovation and reach,” he recommended.