According to a study by global aviation analyst company Cirium, a projected 47% growth in global airline capacity will see a return to 2015 levels by the end of this year. But the pandemic-driven shift to digital channels means expectations are higher than ever when it comes to paying for flights.
Airline payment systems have come under intense scrutiny over the past two years – their weaknesses were on full display when many customers demanded refunds after travel restrictions were imposed.
It became clear that while the process of receiving consumer payments and disbursing them to airline bank accounts was efficient, the reimbursement process was never intended to be more than a small-scale system. ladder. In other words, it was never designed to be fully capable of sending the flow of money in the opposite direction.
Process payments in the new normal
For so many industries, the pandemic has been a catalyst for change, and airlines should see this time as an opportunity to adapt payment processes to meet new customer demands and avoid another refund disaster.
To better understand where airline payment managers currently stand in terms of their systems, CellPoint Digital commissioned an exclusive study to get the perspective of airline payment managers from carriers around the world, of all sizes and of all business models.
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The research reveals widespread recognition of the need to improve payment systems and, therefore, the customer payment journey. The majority of respondents (66%) want to focus on improving the payment experience for airline customers, and when asked about pain points in their processes, many pointed to consistency between channels and less friction at checkout.
Airlines should look to companies such as Amazon and Uber, which have made one-click payment extremely easy, and consider adopting more alternative payment methods (APM). Our research revealed that most respondents currently use less than five MPAs.
More ways to pay
Research pointed out that 84% of travelers now pay with methods other than cash, such as contactless or mobile payments. The convenience of mobile devices, e-wallet options, contactless payments, QR codes and new authentication approaches have transformed the way we pay for goods, and airline tickets should be no exception.
For example, offering the ability to combine airline miles, cash and vouchers to book a single trip would give travelers what they want, and with a simple “slider” feature, airlines can make it easier to use of these different types of funds for travellers. a single reservation. Airlines that don’t embrace this kind of functionality or offer a wide range of APMs risk creating friction points that drive customers elsewhere.
Digital payment innovation can also help automate the process of handling disruptions when things don’t go as planned.
Digital payment innovation can also help automate the process of handling disruptions when things don’t go as planned. For example, if a flight is cancelled, the traveler can receive a digital voucher directly to their e-wallet.
Support processes that underpin the checkout experience also need to be improved. For example, only one in five respondents have an automated chargeback dispute process in place, despite the rise in chargebacks during the pandemic. Recent developments in payment orchestration provide an incredibly useful platform from which to build and grow, but they are only used by two-thirds of survey respondents.
These platforms provide a single interface through which all transactions between the airline, its customers and its payment providers are initiated, directed and validated. Not only does this remove the complexity of monitoring the performance of multiple manually integrated payment methods, but it also gives the airline greater control over transaction flows.
Indeed, when airlines depend on a single acquirer/PSP, they are the ones who ultimately control the flow of transactions. A payment orchestration provider corrects this imbalance by transferring control of the transaction flow. This dynamic routing improves processing success rates and gives customers more payment options and means that failed transactions can be re-routed to the next acquirer, reducing the number of lost sales.
APMs enabled by payment orchestration can give airlines the ability to offer consumers the payment method they want, wherever they are, but of course this requires investment.
Make payments a priority
The good news is that payments are now seen as a strategic investment area, with larger cash injections expected. Our research found that 40% of respondents expect the budget to increase, and nearly one in five say it will increase by more than 20%.
So while COVID-related refunds have brought airline payment managers and their processes to the forefront of the media and their customers, they have also caught the attention of airline C-suites and inspired them to act. . Many C-level executives have now realized the positive role payments can play in their business and are ready to invest and consider it more of a strategic priority than they did pre-COVID.
By considering the customer journey from start to finish, payments can become a strategic differentiator, driving a better experience for travelers and overcoming pain points such as complexity, stress, fragmentation and lack of choice when paying.
Our research is proof that airline payment managers and C-suites understand that frictionless payments both enable a more convenient experience for the traveler and are essential to the overall industry strategy. Based on this, a better external airline payment experience is offered to many passengers around the world.