Traditionally, payments have been an afterthought in the purchase process for the travel industry. They have been the final hurdle for consumers, rather than adding any form of value in the customer journey, where everything relied on the plastic card in our wallets.
But that’s no longer the case. Today we’re witnessing a collision of forces – spanning changing consumer behaviour, a growing millennial demographic, privacy concerns and new regulation. And together they’re creating opportunity and risk in equal measure.
An ever-more demanding consumer
We live in an instant gratification culture where people want it all – and they want it delivered the same day. Today’s consumer expects businesses to meet their needs and, increasingly, payments are playing an influential role in where customers choose to buy from. The payment journey is becoming a central, rather than peripheral, part of the customer experience.
The rise of the millennials
Already the world’s largest demographic, the millennial generation is undeniably an economic force to be reckoned with. Their attitude towards money and debt is different from their parents’. They’ve seen the hard consequences of questionable lending, and, as a result, tend to be financially more risk-averse and less likely to favour traditional credit cards.
Plus, they are the first generation to grow up in a truly digital era. A hyperconnected world where a wallet isn’t defined by its physical constraints but is a concept in their digital existence. This not only shapes their behaviour, but also their expectations.
In fear of fraud
Over the past couple of years, due to several high-profile cyber-attacks, data breaches and misuses of personal information, consumers are more conscious of both the value of their data, and the risk in allowing organisations to access or store it.
How many businesses do they really want to store their card details, in the name of convenience for a future purchase? Will parting with financial information online risk losing their identity if a business can’t guarantee to keep it safe?
Game-changing regulations
Perhaps most important is the shifting regulatory landscape affecting payments. The latest legislation is the Second European Payment Services Directive (PSD2), a multifaceted piece of regulation, designed to create a more competitive payments ecosystem by bringing the bank account back in to play – by enabling third-party access for both data and functionality. But even greater significance lies in the detail of the directive’s Regulatory Technical Standards (RTS), which aim to all-but eliminate fraud. Almost all card transactions will be subject to mandatory two-factor authentication, further heightening the tension between user experience and security.
Are you ready to think differently?
All around the world, consumers are seeing the benefits of a more secure way to pay for travel. A method that feels as natural as the card transactions they’ve grown up with, but one that doesn’t compromise their identity and privacy.
Helping consumers overcome the inertia of their developed habits takes some creative thinking and tangible value. If a traveller opts for a credit card to spread the cost of paying for a trip, could instalments by bank transfer provide a convenient, flexible and affordable alternative? If a traveller chooses credit cards to benefit from additional air miles or loyalty points, could bank transfers be reimagined and given their own equivalent perks? If security and privacy alone won’t motivate a traveller to break with their payment norms, would value-added services such as a welcome drink on arrival at their hotel, or speedier boarding on a flight, both motivate the change while adding a “wow” to the customer experience?
Add in a little creativity, with a proven partner you can trust, and you’ve got the perfect recipe.
emerchantpay helps online business across all sectors to integrate Trustly as an Alternative Payment Method via our secure and trusted payment processing platform. To gain more valuable insights about the changing payments landscape, download Trustly's travel report.