For generations, innovation in payment didn’t mean much more than introduction of cheques and credit cards. But as the world has become more connected, so has the possibility for giant strides to be made in payments solutions for enterprising businesses. There are huge opportunities for those which can offer the most frictionless experience to customers looking to access goods and services, particularly digitally. Between 2008-2016 over 5,000 new ‘FinTech’ firms were created globally between 2008-2016, attracting more than $60 billion of venture capital investment – many of these operating in the payments sector. Key innovations have ranged from contactless payments and cryptographically secure digital currencies to instant payments online, with plenty to come.
For us at Amadeus, the payments industry and the travel industry are very much intertwined. Both full of innovation, and developing at rapid pace, they offer endless opportunities for businesses and the customers that they serve. In an age of instant gratification, and in an increasingly cashless society, the demand for instant payment technology has never been greater. So how can travel companies reap the benefits, whilst overcoming the challenges presented by rapid growth?
Changing traveler behavior, a tricky regulatory environment, regional growth and a potentially confusing array of technologies present a hurdle to businesses looking to grow. Missing out could prove fatal to travel providers - in fact, in our latest payments research, we found that 57% of customers would switch from their regular travel providers if they were unable to use their preferred payment method. Ensuring that companies can meet consumer demand is therefore key to retaining customer loyalty – and with fierce competition out there, decision makers would be wise to pay attention.
Regulations are also causing travel companies to feel uncertain about new payment laws too. Recently enforced EU regulation regarding Strong Consumer Authentication (SCA) requirements which aim to tighten payment security online, mean that providers can’t afford to take their eyes off the ball when it comes to protecting customers online. Travel firms are left to wonder how the new laws will affect the payment processes, especially if this means that customers encounter more friction when paying for goods and services.
The opportunities that payments bring
All this said, new technology undoubtedly brings with it fantastic opportunities when combined with changing consumer behavior. Modern day, tech savvy travelers, are demanding different travel experiences – and this extends to the way that they pay whilst traveling too. The days of exchanging currency look to be numbered, as more and more travelers opt for frictionless payment options with instant exchange rates. Mobile payment technology also means experiences can be researched and booked instantly, wherever a traveler may be.
For travel sellers, allowing customers to pay in their preferred currency, with reliable payment links and uninterrupted service, will ultimately maximize sales and keep online travel shoppers coming back to your website. Our B2B Wallet solution, for example, has been designed to flourish in the new payment landscape.
The travel industry is at a crossroads when it comes to payments innovation, and the next decade provides a great opportunity to improve the customer experience and to manage costs through innovation with a host of advances in FinTech. As a truly global industry, travel requires payment methods that cater to a global customer base. At Amadeus, we are already working hard to adapt to these changes and make sure our customers remain ahead of the game when it comes to payments. Ultimately, this will provide greater travel experiences for travelers around the world.
If you want to learn more about how to unlock new payment opportunities, register here to watch our latest webinar of the Travel Tech Talk series.