Payment tech innovations more than just virtual [Case Study]

One of the more dynamic areas for travel technology revolves around digital payments as firms seek to ensure they are paid in a more timely and efficient manner.

One of the more dynamic areas for travel technology revolves around digital payments as firms seek to ensure they are paid in a more timely and efficient manner.

Margins are thin enough in the sector without being further eroded once sales have been secured, often at great cost in terms of marketing and customer service, by the process of actually getting the money from the customer.

This is a potential problem area that is being made all the more complex by the emergence of mobile, new payment platforms like Google Wallet and PayPal, and the internationalisation of businesses.

Electronic payments potentially touch all areas of business, from paying suppliers and customer payments to expenses, petty cash and even staff incentives and allowances.

Virtual credit card technology, which creates a unique ‘payment card’ of a pre-determined type for each transaction, has been adopted by many retailers looking to avoid card charges by certain suppliers like Ryanair.

This move away from using traditional GDS-based reservations systems has been tracked by payments software firm Ixaris in its annual travel sector barometer report. In 2012 it reported that 25% of respondents to its research were using non-traditional reservation systems half of the time.

Asked about their biggest payment-related challenge, just over a third of respondents cited the impact of card charges and booking fees on margins.

Once the advantages of virtual cards, digital payments and pre-paid currency cards are grasped, firms are able to apply their benefits to existing areas of their business.

Myles Stephenson, chief executive of CorporatePay, said the card company was seeing good growth among tour operators, particularly in sectors such as educational trips.

“Before, operators taking large groups of kids on an educational trip would have carried cash or travellers’ cheques,” he said. “Now, there is the safety benefit, control management of what’s bought and also a currency conversion benefit. And we think there is a broader opportunity in travel for firms to better manage their cash disbursements.”

One travel sector making use of this is airlines, which are issuing crew with pre-paid currency cards so they can better manager crew expenditure when on layovers.

This technology could also be used for passenger compensation as stricter European rules on flight delays come into force backed by court rulings in favour of the customer.

Handing out cards pre-loaded with a cash value means airlines have better control and do not need to handle cash or hard-copy vouchers, plus the cards can carry their brand.

But from a business perspective, the use of virtual cards for paying suppliers is one of the biggest growth areas.Stephenson said: “They allow OTAs, bed banks or anyone in the value chain to make payments to their supply chain and control exactly when those payments are made.”

These virtual systems mean that retailers can pre-determine when that payment is made – on departure, for instance – cutting down on card-denied issues and chargebacks.

They can also determine the precise amount to be debited, reducing errors.

One of the headaches for travel firms is the lack of industry standards on payments, a reflection of how this area is still, relatively, in its infancy.

Firms like Multicom, a mainstream supplier of reservation systems to the travel sector, are starting to aggregate payment technology suppliers, bringing them in to the fold.

John Howell, Multicom managing director, said its MultiCommerce platform was now fully developed and ready for clients.

“We are drawing on the best-in-breed suppliers. We are not talking about a large number – there is a lot of duplication in the market – but they are not all the same,” he said.

CASE STUDY

eMerchantpay: Instant payment acceptance for airlines

The Challenge

eMerchantPay wanted to provide international airlines with instant access to online payment acceptance and processing capabilities.

At the time, a provider of internet-based sales and reservation systems for small and medium-size airlines was looking for an ability to act as a super-merchant to its sub-accounts.

eMerchantPay suggested eliminating the need for airlines to go through merchant account approval, technology selection and technology integration processes.

The Setup Solution

The provider of sales and reservation systems functions as a merchant of record to eMerchantPay and uses its payment module.

The payment module has sub-accounts to accommodate various airlines and each airline has its own payment page branded in their look and feel.

eMerchantPay provides a hosted payment page, which is fully customisable, or a direct connection. For both, a comprehensive API description is in place.

The Payment Methods

Apart from credit cards, multiple alternative forms of payment are available, including local debit cards, online bank transfers, cash payments, e-wallets and more.

Local acquiring and payment methods increase the booking conversion ratios and the ultimate sales volumes.

The Result

Since March 2012 eMerchantPay has been providing new payments capabilities fully integrated with the internet-based sales and reservation system.

This has had a direct positive effect on the airline sales volumes compared with earnings on start-up airlines that go live without credit card sales.

Start-up airlines can be up-and-running and in business instantly, enabling consumers to make travel reservations and purchase tickets.

Established airlines can also benefit from increased sales by offering a wide variety of mainstream global, regional and country-specific payment brands and alternative payment methods, as well as payment acceptance in more than 150 world currencies.

Currently, 10 European airlines have signed up to use eMerchantPay instant payment acceptance.

The Benefits for Airlines

• Business expansion opportunity through localised payment methods
• Customised payment window adapted to each key area
• Free integration with eMerchantPay fraud scrubbing tools
• Business monitoring and extensive reporting