21st October, 2020
Travel merchants are closely evaluating the impact of the pandemic on several counts, and one of the key areas is related to working out a balanced payment strategy.
In order to work out the same, airlines not only must shape up a frictionless booking path for a better conversion rate but also need to evaluate how they can bring the cost of a transaction down, as they attempt to make the most of the situation. The top priority in terms of payment strategy post Covid19, as highlighted by Yuval Ziv, MD – Digital Payments, Nuvei, during the inaugural session of the #ATPS Virtual Conf. 2020, is to protect cash flow, and for the same airlines can focus on attractive non-cash offers. Referring to findings from a recent study, he said around 44% of those interviewed from the travel industry have indicated the same. Other aspects were as follows: reduce payment costs (25%), garner additional revenue (17%) and protect existing revenue i. e. to prevent fraud (15%).
Edgar, Dunn and Company’s Pascal Burg referred to the significance of payments data analytics and regular discussion with payment partners.
In the second session, Payment Universe’s Marco Conte mentioned that scammers haven’t spared any opportunity to create havoc. “Internal communication (sharing information between teams) and process improvements are needed,” he said. Plus, Conte also stressed on setting up an apt multi-acquiring set up and learning from the new normal by counting on refund and chargeback available data.
Support immediate recovery
CellPoint Digital’s CEO Kristian Gjerding spoke about the significance of payment orchestration. As for how it supports immediate recovery, the company asserted that such move would allow airlines to quickly add the payment methods customers prefer in each market during the checkout process, reducing cart abandonment and maximizing conversions. On the processing side, payment orchestration reduces the cost per payment transaction by dynamically routing payments to local acquirers to reduce cross-border traffic (and fees). Just a few percentage points improvement on an airline's conversion rate, authorisation rate, chargeback win-rate will make a huge impact on their operating margin. Payment orchestration helps them achieve that, so that's what they should focus on.
From an airline’s persective, Scott DeAngelo, EVP and CMO, Allegiant, mentioned that options like being flexible with payment or paying them in installments is a great way to boost the conversion rate. He said the installment payment offering fitted like a glove considering Allegiant’s strategic focus. As for embracing such payment option, DeAngelo referred to the significance of making travel affordable and accessible, and also the same playing a role in not just selling an airline seat, but also other aspects of travel including a hotel accommodation, car rental etc. So buy now pay later (BNPL) has a role to play in stepping up the average order value, be it via addition of an air ancillary or a non-air ancillary. Uplift’s VP-Commercial, Chris Stacey shared that his company, as specialist in BNPL and being 100%-focused on travel, has been counting on data and focusing on customer-friendly policies to offer a relevant payment product and approving more customers.
In a session about the handling of chargebacks and how to ensure customers don’t end up going to issuers, Monica Eaton-Cardone, COO, Chargebacks911 emphasised that it is imperative to maintain open and honest communication with customers regarding any delays or answering their queries. This can help in strengthening ties with customers, as the company shows the customer that it is aware of the situation. “Setting expectations proactively reduces chargebacks,” said Monica.
“Lack of information results in customers behaving badly,” she said. According to her, refund isn’t the only satisfactory answer.
Congrats Rebound Travel!
Rebound Travel emerged as the winner of Ai’s Lion’s Den Pitching Contest of new and innovative Payments and Fraud Prevention Solutions, held as a part of the conference.
The company won The Best Pitch award (Audience Poll) as well as bagged the Best Product award (Judges' Verdict).
The contest featured great presentations from three companies - Rebound Technologies, SecuredTouch and Pennies.
"What has lacked in the airline industry so far has been an innovative and cooperative approach to manage the refund process during this pandemic, according to Tobias Wessels, Founder at Rebound. The company provides the intelligence so that airlines offer the optimal offer type and value that motivates customers to choose an alternative offer to their refund while keeping the airline's opportunity cost as low as possible.
Stay tuned for Day 2 of #ATPS - https://lnkd.in/dHqfzvZ
By Ritesh Gupta