Embedded Payments Assist Travel Companies in Increasing Consumer Spending

In the fiercely competitive world of online travel, direct suppliers are battling it out with online travel agencies (OTAs) to secure their share of consumer spending, as reported by PYMNTS. However, amidst the post-pandemic travel rebound, suppliers such as airlines and hotels are increasingly focused on capturing consumers’ attention and expenditure to avoid the commissions paid to dominant OTAs and platforms, according to Laurie Gablehouse, Worldline’s Consulting Services Global Head of Travel Solutions.

Gablehouse emphasized that payments now play a crucial role in the overall customer experience, with suppliers holding a competitive advantage in creating self-service models over the platforms. By expanding payment acceptance options, consumers gain the freedom to customize their travel plans, choose preferred providers, and utilize loyalty rewards along the way. This shift signifies the rise of the self-service model, where brands assume the role of the de facto travel agent, seamlessly embedding payments into the process.

Gablehouse stated, «We’re seeing the shift towards booking direct instead of using an aggregator because people want to control the aspects of what they are going to do and how their money is being spent.»

The key to success in payments strategy, Gablehouse highlighted, lies in simplicity. Regardless of the platform used or the device employed, consumers should be able to effortlessly find their preferred brand, book, and pay for their travel needs. Whether utilizing PayPal, Apple Pay, WeChat, or other payment methods, the experience must be seamless and hassle-free.

While there is already some progress in implementing flexible payments strategies that accompany consumers during their travels, there is no one-size-fits-all approach for suppliers operating across different geographies and currencies. The complexity becomes more pronounced when managing fund flows and reconciling payments, particularly in the event of cancellations, refunds, or credit reversals.

Gablehouse emphasized the importance of understanding the movement of money across distribution channels and managing the cost of acceptance. These factors should be considered as critical aspects of a comprehensive payments strategy for any large brand. Additionally, with the growing popularity of installment plans and pay-later options globally, suppliers need to address regulatory variations, payment intricacies, and regional preferences.

Exploring the advancements in technology, Gablehouse identified blockchain, generative artificial intelligence (AI), and biometrics as transformative tools for the travel industry. Worldline’s enterprise clients have been exploring the use of biometrics and phone-level data to enhance customer experiences during travel. By utilizing AI, customers can receive personalized prompts and finely tailored choices while booking their trips.

While the prospect of eliminating intermediaries is appealing for suppliers, Gablehouse stressed that execution is paramount. Building a strong brand reputation and establishing trust are critical for attracting customers directly.

«To move those customers to you directly, you have to build the brand reputation along with trust,» Gablehouse explained.

In the rapidly evolving landscape of travel, embedded payments are driving significant changes, empowering travel brands to enhance customer experiences, capture consumer spend, and establish long-lasting relationships with travelers.

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