The next generation of wireless internet is no longer a far-fetched dream for tech lovers. 5G is set to revolutionise not only communications, but also user experiences and overall consumer habits. Travel is an industry that could greatly benefit from 5G, leveraging innovation, customer experience and operations optimisation. In terms of innovation, mobile payments are an increasingly popular payment method, a trend which will only grow with the arrival and massive rollout of 5G.
What is 5G?
5G is the fifth generation of mobile internet connectivity. Following 4G, it promises much faster data and more stable mobile internet. It’s the latest update to the series of international standards that mandate how mobile phones should function. This set of rules covers everything, including what frequency radio waves should be, which phones they’re communicating and have been upgraded from the pre-existing 4G standard. 5G comes with three major benefits: better coverage, increased capacity and lower latency.
While still in its early stages, mobile providers have slowly rolled out 5G networks in countries such as South Korea, the US, the UK and China.
The rise of mobile bookings
Research conducted by Awin revealed that 64% of British holidaymakers in 2018 booked their holidays online. Of the 64% that made their reservations online, 49% of them booked their holidays through their mobile phones. On top of that, Google, the world’s leading online search engine, has prioritised mobile sites over desktop sites, pushing OTA’s and travel merchants to optimise their websites for the best possible mobile experience.
Faster internet speed and lower latency that come with 5G will push travel merchants to rethink their mobile customer journey, ensuring mobile holidaymakers’ demands are satisfied. This consumer shift towards mobile will lead to an ever-growing adoption of mobile payments.
Pushing it even further than travel, eCommerce is set to explode after a smooth and scheduled 5G rollout; a recent analysis from Adobe Digital Insights pointed out that over the next three years or so, 5G deployment will result in an additional $12 billion in mobile commerce revenue for US retailers.
Leveraging your payment provider to optimise payments
When thinking about payments, merchants should always consider the end-user experience. Especially for travel merchants and travel distribution, where the customer journey can be quite complicated and in multiple layers, working with the right payment service provider could really pay off. Ensure that your payment gateway takes on the responsibility for providing fast and secure transactions, but it also undertakes the relationship management between you and the payment processor. This process is key for producing a positive user experience. When the payment gateway integration itself isn’t built to be user-friendly, the problems can snowball across a merchant’s entire payment processing system. This trickles into the user experience, which can hurt a merchant’s brand value.
Why it pays off for travel merchants to offer Alternative Payment Methods
Another key point is Alternative Payment Methods. 51% of travellers who book their holidays online, pay with APM’s more often than cards and cash combined (‘The Travel Payments Guide’, Amadeus and PPRO report, 2019).
Travel merchants operating across territories can greatly benefit from APM’s. With over 30% of a typical airline’s bookings originating outside its home market and 17% outside its home continent, you can quickly see why accepting the right payment methods across locales is important. When it comes to alternative methods, Asia is the place to start. 59% of the region’s eCommerce is paid for using APM’S, with WeChat Pay and Alipay paving the way.
In Europe the pace of change appears quicker still. Major markets such as France, Spain and Sweden all witnessed year-over-year growth in APM’s in excess of 7%. Across Europe, APM’s already account for around half of online spend.
Different APM’s are prevalent across sectors and territories and as a business, you need to be able to offer the latest in payment technology as your lack of choice may deter consumers. As more customers turn to payment methods other than Visa and Mastercard, it’ll become even more significant for merchants to adopt APM’s that help them reach a broader global market. Partnering with a trusted payment provider that can help you provide a seamless payment experience, with a clear process in refunds or cancellations in place and robust fraud management solutions, is key towards the next phase of travel payments.
emerchantpay, a proud member of the Fintech Power 50, provides over 60 alternative payment methods, easily customisable for travel merchants. Contact us to arrange a call with our payment specialists and find the APM that suits your business needs.