Guest Post: Travel’s consumer loyalty revolution starts with payments

James Butland, VP payment network of Mangopay, outlines how customer loyalty begins at the start of the funnel

In a competitive market, one of the best ways any business can differentiate themselves is to focus on customer loyalty. Loyal customers are not only more likely to return for future visits but also spend more than new customers. This is no different for the travel sector. Loyal customers help businesses stay ahead of the competition while ensuring a steady stream of revenue each month.

However, building loyalty isn’t as straightforward as it once was. Consumer expectations are continually being shaped by seamless digital experiences and as a result, loyalty can’t be won by rewards programmes or special offers alone.

Many tackle this challenge by enhancing the travel experience or going digital, but these tactics only address part of the challenge. True loyalty requires a broader, more holistic approach - one that evaluates every touchpoint in the customer journey, from initial browsing to booking and beyond. 

One often-overlooked aspect is the payment process. For the travel industry to truly stand out, the customer journey must be seamless from start to finish, and that includes making payments frictionless, intuitive, and memorable.

Payments pave the path to customer loyalty 

The way we book holidays today is vastly different from how it was done in the past - 

visiting a travel agency, where payment processes were simple. The emergence of online booking platforms converging with evolving payment methods has significantly reshaped the entire travel industry. Yet during this shift, the payment experience has been left behind, undermining the overall customer journey and in-turn, consumer loyalty. 

Research by PayPal shows that complicated or lengthy checkout process leads 22% of shoppers to abandon their purchases. Where purchases are often high-value and involve multiple steps, streamlining this process is critical. 

So why has this become a pain point?

Well, the internet. It has quickly changed expectations and today, booking a holiday can be as fast as ordering a takeaway. This demand for instant gratification leaves little room for outdated or inefficient payment processes. Those that don’t adapt risk losing out. 

Creating a loop of love and loyalty

So the customers are on the platform, but how can they be retained? Payments are also the answer to this conundrum and it’s essential travel platforms find new ways to incentivise repeat purchases.

One of the most effective strategies is leveraging e-wallets to create loyalty loops that reward customers for their continued business. By allowing users to collect points, earn cashback, or top up their e-wallet accounts, travel platforms can significantly enhance customer retention and encourage re-spending.

E-wallets’ convenience makes them a powerful tool in fostering loyalty. Consumers can store their loyalty points or cashback directly in their e-wallets, ready to be used for future bookings. This easy accessibility encourages repeat use, as the funds are often seen as an incentive to spend again. Further, a top up feature keeps customers connected to the platform even during periods of inactivity. 

Customer retention is also critical when handling low-value refunds or compensation payments. Customers expect timely compensation, whether it be for something smaller like the cost of a meal or the value of accommodation. However, manually processing each refund if a consumer faces multiple cancellations, and can tie up valuable resources. Embedded payments automate this process, ensuring customers receive their refunds seamlessly while freeing up operational capacity. This efficiency not only strengthens customer trust but also encourages customers to choose the platform again for future travel. 

The payment balancing act for loyalty across multiple sellers

Perhaps a travel marketplace operator is looking to strengthen loyalty-building efforts. Marketplaces have their own unique challenges, and an extra layer of consideration must be factored in. As these platforms act as intermediaries for multiple businesses, consumer loyalty requires more than just a smooth checkout: a well-orchestrated approach to payment processing and distribution. 

For example, if the payment process feels untrustworthy due to unclear charges, lack of transparency or poor refund options, consumers may not return, even if individual sellers provide a good service. This makes loyalty to the platform itself highly dependent on a frictionless, secure, and transparent payment process.

One best practice is the use of split payment functionalities enabled by embedded payments, which allows transaction funds to be distributed among key players. For example, when booking a holiday rental, the property owner receives their share for rental accommodation, the property manager is compensated for maintaining and managing the listing, and the booking platform secures its commission fee—all within a single payment environment. This approach not only streamlines operations but also fosters trust and loyalty by ensuring transparency for all stakeholders. 

What customers desire today is simple: to feel valued and understood. In a crowded market, to truly stand out, you need to take a new approach to building loyalty. By leveraging payments to do this, you, too, can create an ecosystem where customers are constantly engaged and motivated to keep spending with you.