Ai Editorial: Assessing Aer Lingus' plans for a robust payment infrastructure

8th May, 2019

Aer Lingus recently chose to implement the Apple Pay solution on its mobile app. This payment offering was delivered as a part of the airline's new payments hub platform. Ai's Ritesh Gupta assesses how Aer Lingus is strengthening its infrastructure.

Consumers are being offered the option to shop via vocal assistants, tapping of their phones, QR codes...the list of new options is enticing. Technology is increasingly making it simple for shoppers to wrap up their tasks. To make the shopping experience complete, retailers are also looking at secure payment acceptance.

In an era where the number of ways in which a customer can pay has risen tremendously, facilitating such a wide variety of payment methods can be an arduous task for airlines. 

But airlines can't fall behind when it comes to embracing such trends in retail and commerce. A shopper doesn't differentiate between any product category. So be it for grocery, books or travel, they expect a similar experience. But a key question here is - are airlines nimble enough to facilitate a transaction via a mobile wallet in a specific market and or a new alternative form of payment?

"Airlines can’t easily support new payment methods because of the complexities of the systems while legacy systems are lacking robustness that would enable quick adoption of new payment methods," said Vojin Rakonjac, Head of Payment Solutions, Voyego.

Rakonjac asserted that there are several reasons behind airlines' lackadaisical approach when it comes to accepting new payment methods. It is owing to not aptly comprehending a shopper's expectations, not keeping pace with the current trends in mobile commerce/ e-commerce, and lack of technology readiness.

"Unlike other online merchants, airlines have a lot more systems and each performs its core tasks (inventory management, PSS, Reconciliation tools etc.) but there is no dedicated payment system," said Rakonjac. He further explained: to make things worse, not all of the airlines systems are owned by the airline, so there are many 3rd party vendors to deal with. Because of this complexity, when airlines intends to introduce a new payment method, they need to change a lot of internal systems to accommodate for the data/ flows that are specific to that new payment method. This requires a lot of synchronization with internal departments and 3rd party vendors, and a lot of time and resources to add a new payment method.

"As long as there is no dedicated payment system that is taking on the complexities of the payments, there cannot be an agile environment – because all the systems are impacted," said Rakonjac.

Setting up a robust payment infrastructure

Selling an itinerary featuring multiple destinations or cancelling the same tends to be a complicated scenario for airlines. And this does have its repercussions on the payment side as well.

Rakonjac acknowledged the same and mentioned that payments in airlines are a bit more complex than in other industries.

He said, "For example, if you are buying a book, worst that can happen is that you can issue a refund. With airline it is not that simple. When you go to airlines website, you can: make a booking, manage booking (and change a contents of your basket many times between then and departure (which can be one year from then and even make payments on Check-In (and still refund at the end if needed). So, for starters, payments in airlines are more complex than what you would find with typical merchant."

He further added, "However, the biggest issue is not in the complexity of payments, but rather in the complexity of the systems. In order to create a robust payments infrastructure, you will need to make sure that each of the airline systems performs its core competency and to dedicate a single system that will perform payment-related activities. Currently, because there is usually a lack of dedicated payment system, all of the systems in airlines infrastructure contribute to payment-related processes in one way or another."

To make robust payment infrastructure, dedicated payment system is required. This system needs to cater for all the channels (web, mobile, kiosk, PoS, chatbot, voice etc.) as well as for all the business processes (call centers, airport operations, revenue accounting etc.).

"Once you release rest of the systems from payment-related activities and delegate it to one system, all of the channels and processes can work on top of the same data making it consistent. Once change is needed, you make that change in one system and they are instantly available to everyone," said Rakonjac.

While infrastructure is important, it is just one piece of the puzzle. A tailored payment infrastructure and the structuring of team internally, where multiple teams working in sync within an agile environment, paves way for payment optimization.

Learning from Aer Lingus

Aer Lingus recently launched Apple Pay as a payment method on the Aer Lingus mobile app.

Sharing the experience on working with the airline, Rakonjac said, "Aer Lingus wants to lead in innovation when it comes to payments and follow the latest trends, so they bring more value to their customers. In order to do so, there were number of challenges to overcome in order to make a robust and future-proof system."

He added, "Firstly, it has to be made sure that one is not building a system that will cater for one payment method only – but rather think a bit into the future and predict possible scenarios. Secondly, one cannot overlook requirements of different departments. Knowing payments is one thing, but without knowing airline specific scenarios and needs of every department is completely different. Then, you don’t want to build a system that will be limited to a single PSP but to have a flexibility to work with any PSP if airline wishes to do so with minimum changes (and in some cases, you want to integrate directly with a specific Payment Method)."

Rakonjac also recommended dos and don'ts for introducing digital wallets or any new payment method:

1. Make sure you support right payment methods for the regions you operate so they are relevant for the customers you serve.

2. Wherever possible, pre-fill and automate processes so customer can have a seamless purchase experience and make sure that transition from different channels is as easy as possible.

3. Don’t use some new technology or introduce new payment methods just because other airlines did. Make sure you have a valid reason to do so given many processes become exponentially more complex with the introduction of each new payment method.

4. Don’t make any changes to the systems if you are thinking of a single wallet – always have a long-term strategy so you can make changes easier later down the road if needed.

Vojin Rakonjac, Head of Payment Solutions, Voyego is scheduled to speak at the ATPS about how airlines can transform the overall payment experience with their current infrastructure on 10th May, 2019.

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