Guest Post: Why embedded finance is the secret to captivating Gen Z travellers

Philipp Buschmann, co-founder and CEO of AAZZUR, tells us how to bag them as holidaymakers

While the end of summer may be approaching, that doesn’t mean travel plans are. Travel companies can take this opportunity to shake things up, become fully digitalised, and integrate embedded finance solutions to really speak to Gen Z’s. 

This doesn’t mean making radical changes or extreme makeovers, but instead broadening their appeal with integrated payment options, virtual debit cards, subscriptions, tailored insurance, and embedded budgeting tools. Sound complicated? It’s far from. From inflation to global pandemics, travel companies have certainly faced a swathe of challenges, but diversifying their offering of financial products could be the magic bullet to enthuse customers again. Here’s how.

Leveraging BNPL options

Communicating your brand to a new audience can be a headscratcher if you don’t understand what they want. The tech-savvy generation is always looking for convenient options that don’t hurt their wallets or the environment, and this is something businesses can tap into with embedded finance at their disposal. 

To make group trip planning hassle-free, companies can offer virtual debit cards to Gen Z customers. Smartphones are of course Gen Z’s main source of interaction and entertainment as they make up the majority of users, so this is where travel companies must speak to them. 

Buy-Now-Pay-Later (BNPL) remains an incredibly popular option for young people looking to fund expensive trips or buy things for their holidays. A staggering 70% of Klarna users are Gen Z and Millennials. The demand is there for flexibility, especially in economic turbulence which greatly affects young people who are typically on lower salaries. Understanding each demographic’s spending habits is key when implementing embedded finance solutions, and BNPL proves to be the magic ingredient for sales success. 

Subscription-based trips

The innovation potential continues as travel companies can also offer travel subscriptions, where customers pay a monthly fee for a set number of trips or benefits. This option could attract Gen Z travellers who prefer predictable expenses and value experiences over ownership. For companies looking to promote weekend trips and package holidays, a subscription model could prove to be lucrative and entice the Gen Z market which are desperate for cheaper ways to travel. Train companies can do the same for interrailers, offering staggered pricing and lower rates by encouraging early booking, the possibilities are immense. 

Personalised trips

The pros of marrying embedded finance solutions with data your organisation has collected are that customer behaviours can be monitored in real-time. This enables personalised customer offerings which, in turn can increase spending and loyalty. Gen Z is always after a bargain, and by targeting discounts to suit their needs and interests, the market will grow, and travel companies can prioritise innovation to engage different segments of customers. The rise of AI use cases means adoption can be swift and inexpensive as it can analyse booking history to create specific travel destinations, making marketing more personable and effective.

Rewarding travellers

Imagine this: you know how travel loyalty programs have been around forever? Airport lounges are all about making you feel a bit fancier and comfortable before your flight, and getting those seat upgrades is a nice perk if you’re a regular flyer. But here’s the thing—there’s way more we can do with those loyalty points now, and embedded finance is changing the game.

So, picture this: instead of juggling a bunch of different loyalty programs and trying to remember where all your points are, you could have them all in one place, like in a single wallet on your phone. You could easily use those points for booking hotels, renting cars, or whatever you need, all from one app. Super convenient, right? And because everything’s centralised, companies can keep you on their platform, making it way more likely you’ll stick around and keep using their services.

Marriott Bonvoy is already doing something like this—they’ve got it set up so you can get rewards instantly, which is exactly what Gen Z is all about. It’s all about making the whole experience easier and more rewarding, keeping people coming back for more.

 Sociable spending

Gen Z is all about doing things with their friends, socialising is key. So, imagine if when you’re booking a trip, you could easily split the costs with your friends right there in the app. No more awkward money chats or chasing people down for their share later. It would make planning group trips a breeze, and you’d definitely be more likely to use that app again when it’s so hassle-free.

Additionally - what if you could also crowdfund your trips? Have a travel fund where your friends and family could chip in to help you make that dream trip happen. It’s in line with how Gen Z leans on their social circles for support, so would work.

Plus, imagine if you could set up a savings account specifically for travel right in the booking platform. You’d put away money for that big trip you’ve been dreaming about, and maybe even get rewarded for hitting your savings goals. Companies could even match your contributions or offer some kind of fun rewards along the way to keep you motivated.

Delta Airlines is already onto something like this with their SkyMiles program. You can rack up air miles from everyday purchases at your favourite brands, and the best part? Those miles don’t expire, so you can be spontaneous and book a last-minute adventure whenever you want. It’s the kind of thing that really clicks with Gen Z—they love the flexibility and the idea that their everyday spending can lead to epic memories.

Enabling group payments or splitting costs among friends directly within the booking process can appeal to Gen Z’s social nature. This feature can simplify planning group trips, making the company a go-to choice for group travel. In addition, implementing a platform that allows users to crowdfund their trips, where friends and family can contribute to a travel fund, can resonate with Gen Z, who often rely on their social circles for support.

In addition, embedding tools that allow customers to create travel savings accounts or set up travel funds directly within the booking platform can encourage Gen Z to save towards specific trips. Gamifying this process with rewards or matching contributions can further incentivise savings and therefore drive revenue for companies. Delta Airline’s SkyMiles demonstrates perfectly how to attract Gen Z customers as their program allows members to earn air miles through everyday purchases from popular brands and there is no expiration date, so last minute memories can be made.

Customise travel insurance

Imagine this: you're booking a trip, and just as you’re about to finalise everything, you’re offered an insurance option that’s completely tailored to your needs. It’s not just a one-size-fits-all plan—it’s based on where you’re going, how long you’ll be there, and what kind of trip you’re taking. For Gen Z, who love personalised experiences, this is a game-changer. It makes purchasing insurance not only easy but genuinely relevant to their plans.

Here’s the exciting part: with embedded finance, travel doesn’t have to be an expensive luxury. Companies wanting to break into new markets and capture the attention of Gen Z—who will soon make up the majority of the workforce - really need to embrace this kind of innovation. 

Whether it’s for business or pleasure, these solutions can transform the travel experience, making it more accessible and customised for everyone, especially the younger generation looking for something that truly speaks to them.

Providing personalised insurance options based on trip type, duration, and individual preferences can appeal to Gen Z’s desire for tailored experiences. Embedded insurance products, offered seamlessly during the booking process, can make purchasing insurance more convenient and relevant.

With embedded finance, travel doesn’t have to be a luxury. For companies looking to venture into new markets and capture the attention of Gen Z who will eventually make up the majority of the workforce, this type of innovation is key. Whether people are going for business or pleasure, the solutions available will bring a new lease of life to your business and the way we travel.