A new Amadeus survey into frictionless payments has underlined how it is becoming increasingly important for firms to embed payments tech into the heart of their customer experience.
With stricter rules on two-step authentication coming in, a more global travel sector and proliferation of payments types, Amadeus says it is more vital than ever to offer choice.
On top of this, emerging generations of travellers are booking later, travelling to more places and creating their own trips but expecting to pay how they want even when in overseas markets.
The Frictionless Travel Payments report was based on the findings of an online survey of 5,665 travellers from the US, UK, France, Italy, Germany, Spain, China, India, Japan, Brazil, and Mexico conducted by Sapio Research.
Amadeus says where the fragmented world of travel meets the fragmented world of payments there are opportunities for brands to gain a competitive advantage.
Travel Payments friction points:
- Lack of Choice
- Poor Transparency
- Security Concerns
- Addressing Airport Payments
- Lastminute Frustrations
Bart Tompkins, managing director of Amadeus Payments, said: “Payments is becoming more and more important in the world of travel.
“Ten years ago it was a hidden thing behind the scenes no one really cared about, but it has come to the fore now and we are seeing it now when we get RFPs [Request For Proposal] from airlines.
“Everyone still suffers when payments do not go smoothly every time, so it’s this idea of frictionless travel payments.”
Although Amadeus has been in the payments business for three decades it created a special division just seven years ago and not it employs 200 staff.
Given its position in the global aviation sector, the firm claims to be one of the world’s biggest payment gateways with €120 billion transacted through it in 2019. This year or next it expects to reach the 1,000 customer mark.
The firm has always helped travel companies receive payment, acting as a global marketplace for many payment types, but has more recently been developing systems to help firms pay suppliers.
This orchestration layer involves virtual cards, but also new ways of paying that suit both supplier and retailer and last year saw transaction volumes double.
It allows agents and airlines to offer their clients an ever-growing set of payment options and to agree commercial terms for how they want to pay and be paid.
The Frictionless Travel Payments report identifies increasingly popular platforms that allow payment on instalments as a growing area, especially for younger millennial travellers.
Tompkins said the situation is further complicated by the increasingly international nature with payments with new firms, like Paytm.com in India, springing up on the back of the boom in mobile.
“In your home market payments tend to work quite well; it’s easier. But when you go abroad you find payments do not work in every market. We are talking about making it frictionless for everyone everywhere.”
The vision is that an Indian traveller who chooses to use Paytm will be able to their preferred payment type during a visit to Europe to pay for aspects of the trip like hotels, excess baggage in the airport, taxis or general expenditure.
The Amadeus report found 70% of will choose a provider because they offer the payment type they prefer to use while 60% would abandon a transaction if there was a problem with the payment process they wanted to use.
“Airlines are putting a lot more weight into the payments experience. Payments is being deeply integrated. Most ecommerce giants dedicated have teams looking after payments,” said Tompkins.
“It’s really important that you experience is good for stickiness because you are more likely to stay with that brand.”
Tompkins said this will become increasingly true when new rules about secondary authentication come in adding a potentially more onerous process to payments.
Jean-Christophe Lacour, Amadeus head of payment services, said millennials and Gen Z are driving a more frictionless experience as they transact on mobile phones and apps.
“It’s more about the repeat purchase. Retailers want customers to come back to them. You want to create stickiness with your customers, and trust and flexibility.
“That could be the main reason a consumer buys with one airline and not another if the prices are the same and the destinations they fly to.”
Lacour said travel firms looking at offer instalment payments can make the process less clunky by pre-vetting customers so they can get immediate approval.
And he said the report showed how vital it is to not only offer payment choice but to ensure there are no hidden surprises or fees when the customer come to finally convert.
“The problem is travel is no longer travel in one country it’s across borders and more and more global. It’s important that people can find the payment methods they love at home.
“And people want full transparency. Consumers want to know what they are buying at check out and to avoid any surprises when they get back home and look at their bank statements.
“One big pain points is bank charges. We can offer currency conversion at the point that you are buying.”
Lacour added that firms should also make security a priority to make sure that card data is not compromised and any data collection complies with European GDPR rules.
“All these things may not be visible to the consumer but they are important and contribute to the right experience and stickiness for the consumer.
“With new technology you can really achieve secure and seamless payments, not clunky. This is security with no detriment to the conversion retailers want and the experience consumers like.”