The payment journey between airlines and their passengers is a critical factor for both parties. It will become even more pivotal when the travel industry returns to full capacity post-pandemic.
Airlines have complex payment processes across various sales channels, devices, countries, currencies, payment instruments, and intermediaries. Every transaction is a delicate orchestration of payment steps, and every decision on this route impacts an airline’s revenue. An ineffective turn represents additional cost or revenue loss.
Preventing this means removing barriers affecting the airline’s bottom line and the customer experience. Customers want payment options that are simple, fast, and familiar – delivering a frictionless checkout process. On the other hand, an airline needs to guarantee safety and cost efficiency by honoring regulations, preventing fraud, and connecting to processors that enable better acceptance rates and lower fees.
How can airlines ensure that their payment processes benefit passengers and their business? Start by considering our 5 top tips:
Payment options
If a customer wants to make a payment and you do not support their preferred method, revenue is lost. It is vital to give them the option to pay the way they want, including mobile payments. A striking example: when Finnair introduced Alipay for in-cabin payments, sales increased by 200%.
Streamlined process
Customers may abandon a payment process if there are too many steps, or they get redirected to third parties’ platforms multiple times. The same goes for any technical downtime or errors: an incomplete payment means revenue is lost.
Secure payment path
Be aware of fraudsters; the airline industry loses $1.4 billion per year due to fraud. Payment service providers offer various anti-fraud solutions, but airlines should consider having an in-house solution tailored for their specific requirements and customer needs.
Also, make your data pathways safe. A data breach can cause tremendous damage both financially and reputationally. Partnering with a tokenization provider can help with secure data transactions between partners, while mitigating the financial risk in case of data theft.
Variety is key
Airlines should have alternative payment processors, so that business can continue even if there is an issue with one provider. Keep in mind that all providers come with different benefits and drawbacks. Additionally, having the choice between multiple providers and acquirers guarantees a better negotiation position.
Transaction tracking
Ensure that nothing is lost along the payment journey: all fees and transactions need to be tracked and correctly matched. Therefore, you should store as much transactional data as possible for precise tracking. An automated solution that collects different types of reconciliation reports and maps them to internal financial records can reduce write-offs and ensure that you pay only your obligated fees.
Conclusion
Suitable payment routes are key to an enhanced and more profitable customer experience. While there are many steps to consider, airlines can leverage innovative strategies and digital tools and processes to make payments work for their passengers and their profits when widespread travel resumes.
Vojin Rakonjac
Head of Business Development, Travel
