Airlines and travel companies should start deploying payment methods that are aligned with airline operations and airline customers’ behaviors and needs. Enabling more alternative payment methods (APM) as they become available is a necessary step for collecting new revenues and enabling mobile payments throughout the journey, from booking and ticketing all the way to post-destination purchases.
Finance and payments executives from airlines across the Americas and Europe say that the expectations of “raised-on-mobile” travelers, improved onboard Wi-Fi connectivity and access to more alternative payment methods (APMs) in key markets are influencing their mobile payment strategies.
According to new research commissioned by CellPoint Mobile, notes even as payment executives identify common challenges across the airline industry – including the costs, complexity and lengthy time-to-market for integrating new payment solutions – they say they are making it easier for travelers to pay from smartphones and digital devices because that’s where passengers, technology, payment innovations and new revenue opportunities are leading them.
The airline brief is based on an April 2017 survey of more than 50 finance and payment executives from airlines in North America, Latin America, Europe and the UK.
According to the airlines that took part in the study, opportunities that are most influential in shaping their mobile payments strategies are:
• 48%: younger travelers who are receptive to mobile payments
• 46%: improved W-Fi connectivity during travel
• 43%: travelers’ existing use of mobile payments and mobile banking services
• 41%: increased smartphone use by consumers
• 39%: availability of more APMs in key travel markets
The same airline executives identify key challenges as they deploy mobile payment capabilities to passengers’ digital devices, including:
• 41%: high cost of integrating new APMs
• 30%: complexity and time involved in integrating new APMs
• 30%: outdated payment systems and technologies
• 30%: concerns about security, fraud and data breaches
• 26%: lack of executive support
According to Statista, mobile payments will exceed $1 trillion globally by 2019. Airlines that enable mobile payments can capture new revenues from direct-channel sales, ancillary products and services, upgrades, loyalty program transactions, last-minute and day-of-travel purchases, and post-destination products and services.