In today’s ever-evolving commerce world where digital payments thrive, optimised payment processes could equate to business growth and increased profitability. Still, the majority (66%) of businesses in the travel sector and in airlines (65%) are losing up to 10% in revenue due to payment inefficiencies.
More specifically, emerchantpay’s latest whitepaper, ‘The Great Payments Transformation’, surveyed over 950 payment leaders across industries, including travel and airlines, across the UK and Germany. The aim was to identify enablers and obstacles to optimised payments performance, as well as projections for payment trends. Our findings show that in view of revenue losses due to unoptimised payment infrastructures, many payment professionals are prompted to adjust their payments strategies and meet shifting consumer needs. Despite the appetite to improve payments performance by more than half (57%) of businesses across industries, roadblocks seem to be on the way.
This article casts the spotlight on the airlines and travel industries across regions. First, we’ll explore the concerns and barriers that impede payment professionals from delivering maximum value to their organisation. Next, we’ll round up top payment trends as spelled out by payment leaders in these sectors, and how emerchantpay can help businesses take steps toward seizing financial opportunities and safeguarding revenue.
Top concerns for improving payments performance
Although travel and airlines are bouncing back after two years of being at a standstill, the skies remain gloomy for payment leaders across the board.
According to our research, eight out of ten (80%) airlines payment executives in Germany admit to be losing up to 10% in revenue due to pitfalls in their payment strategies. This is followed by a whopping 75% of payment leaders in travel. In the UK alone, these figures drop to 59% and 63% for airlines and travel, respectively. In the face of digital disruption, in-depth data is integral to payments performance for businesses looking to stay competitive and make informed decisions that drive revenue. However, a shortage in payment data insights is worrying both industries, with 42% of travel and more than one in five (38%) of airlines payment executives noting it as one of their top concerns.
For the airlines industry, attracting payment talent is another key consideration as highlighted in our research. Precisely, 38% of airlines payment executives view recruiting the right payments talent, equipped with the expertise to deal with intricate day-to-day requirements among others, as equally vital with data. At the same time, navigating changing regulation and compliance is imperative for 39% of travel merchants.
As the above findings indicate, payment professionals in travel and airlines seem to be fumbling in the dark with ineffective payment strategies. In the following section, we’ll take a closer look at the stumbling blocks these sectors are finding on their road to business success.
What holds payment leaders back from optimising payments
Our research uncovered that there are blockers posed against investing in payments performance optimisation and expediting recovery for airlines and travel.
Although respondents from these sectors reported the same challenges to improving payment infrastructure, the order differs within each vertical. In effect, nearly half (46%) of travel payment leaders across countries consider a lack of in-house resources and skills as the top barrier to such investments. This is closely followed by the burden of regulation and compliance taking up time and focus (41%) as well as a shortage in budget in addition to cost issues (39%).
Comparatively, more than four out of ten (43%) airlines payment executives across regions are burdened by regulation and compliance for the time and focus they take. Next comes the shortage in budget and cost issues (42%), accompanied by a lack of in-house resources and skills (40%).
It is evident that payment professionals in travel and airlines are faced with significant challenges in making the most out of their payment systems and reaching their organisation's full potential.
What could be done to optimise payments performance
Our survey demonstrates that an alarming number of organisations aren’t tapping into opportunities to finesse payments performance and maximise their profit margins. However, an optimal payments infrastructure shouldn't operate in a vacuum; it must work in tandem with the rest of the business as well as being agile, identifying shortcomings and making improvements when needed.
Interestingly, when asked how their organisation could enhance payments performance, optimising payment routing was presented as the area with the biggest need for improvement. This applies to both travel (42%) and airlines payment executives (38%). However, when it comes to the second actionable step to increasing the efficacy of payment solutions, priorities vary across sectors. Compared to travel, which could focus on reducing checkout friction by optimising payments pages (42%), almost four in ten (36%) payment leaders in airlines believe they could improve their ability to analyse payment data to understand the customer journey.
Compellingly, both sectors believe that adjusting payment strategies for optimal results could positively impact revenue. In fact, 73% of travel merchants expect to see an uplift of 4-6% in revenue versus 66% of payment professionals in airlines. With these figures in mind, making improvements should lie at the top of the to-do list for both airlines and travel. In instances like this where change is required, it is imperative to partner with an experienced payment service provider (PSP) that can offer strategic advisory, ongoing support and is committed to working as an extension to your payments team.
As our research shows, the travel and airlines industries have certain criteria in their pursuit of the right PSP. The majority of our respondents (45%) deem payment routing capabilities as the most important factor to look for when selecting their PSP. A range of global payment options (40%) and integration options (37%) is also crucial for travel and airlines, respectively. Simultaneously, offering settlement terms was cited as the third key consideration for 37% in travel, while 36% of payment leaders in airlines focus on a range of global payment options when choosing a PSP.
Therefore, the right level of strategic advisory, tailored support, and in-depth payment data from their payment provider can help businesses realise the value of payments performance.
What the future holds for travel and airlines
Delving into projections about emerging payment trends, our research sheds light on interesting insights about travel and airlines. Open banking is a key trend cited by payment leaders in both industries (54% in travel and 48% in airlines) over the next 12 months, riding the wave of predictions about preferred ways to pay. Subscription payments are also forecasted to gain higher traction for almost half (45%) of airlines executives. Digital wallets will continue to be a trending payment method in the foreseeable future for payment professionals in airlines (44%) and in travel (39%).
Looking ahead, both airlines (46%) and travel (41%) believe they would need to apply changes to their payment strategies by the end of 2022 (i.e., in the next 7-12 months) so to put a halt to revenue losses. This suggests that organisations across industries are aware of the urgency to stay in line with changing consumer expectations and plans are afoot to achieve so.
What’s more, in order to implement those improvements, organisations acknowledge the need to work with the right PSP. All respondents (97%) in airlines and travel are satisfied with their current payments partner but are likely to change PSP. This clearly shows that travel and airlines organisations acknowledge the opportunity to maximise the value derived from payments. While switching providers could entail complexities and lengthy processes, more so than ever, it's essential for travel and airlines businesses to partner with a PSP that will facilitate their growth plans, seamlessly and in line with the wider organisations. In the new era of travel, a PSP that takes the time to understand their business model and needs to help them materialise their optimisation efforts is key.
How emerchantpay can help
Our research showed that payment leaders across the board are admitting that inefficient payments strategies have a negative impact on their organisation's bottom line. The ever-changing payment landscape and shifting consumer demand are fuelling a need for change in payment infrastructure and organisations are under pressure to take action or lag their competition.
Here at emerchantpay, we are committed to facilitating performance optimisation by leveraging over 20 years of online payments experience and a rich suite of robust payment solutions. Our collaborative approach allows us to work alongside payment leaders across the travel and airlines industries, and shape tailored high-performing payment strategies via a comprehensive offering. Hear from Audley Travel, a high-end travel operator that selected emerchantpay as its payment partner to revamp its payments strategy and build an immersive and seamless payment journey for their travellers. (Read and download the full case study here).
Are you ready to access the tools, skills and data needed to transform your payment strategy? Get in touch with your payment experts and learn how.