Perspective on Payments: Worldline
As part of our 'Perspective on Payments' series, we interviewed Harry Boyd, Head of Global Sales for Online Payment Acceptance at Worldline Worldline to discuss payment flows in the travel industry, challenges and the shift to mobile.
Worldline covers the entire payment value chain. Our technological experts create and operate digital platforms that handle the millions of highly critical transactions between a company, its partners, and its customers.
What makes the payment flow such an important part of the travel retail experience?
In any retail industry, a smooth payment experience is a key part of the conversion process. Payment friction is a frequent cause of cart abandonment, and can significantly impact your conversion rate.
If payment — the last step in the booking process — doesn't feel easy, quick and safe, it annoys and worries consumers. For example, having to re-enter information they've already given (such as their address) can be enough for them to abandon the purchase, especially on mobile.
The travel industry is extremely competitive – there are many websites offering the same products; the same tickets. If buyers cannot find the payment method they prefer, or if the payment experience is poor for another reason, they may just look for another travel website which offers a smoother process.
What challenges are unique to the travel industry?
Intense competition means high price sensitivity and low customer loyalty. The global nature of the travel industry also means that merchants often need to manage a wide range of currencies and payment methods.
Travel companies often operate with slim margins, and as a consequence, they are sensitive to fraud and non-guaranteed payments. They cannot accept payment methods or transactions that could generate late declines or charge-backs. Intense competition means high price sensitivity and low customer loyalty. A fast, reliable cash flow is also critical, since travel agencies typically need to pay producers extremely fast.
The vast market and online offering for the travel industry has made meta-platforms such as travel search engines or marketplaces invaluable tools for every traveller.
Why do you feel that optimising payments is especially important to get right within the travel ecosystem?
Optimising their payment setup will enable travel companies to both increase revenue and reduce costs. A better payment experience leads to improved conversion rates and better margins, while reducing fraud obviously reduces unwanted costs.
What are travel suppliers and retailers ignoring now that they should start to consider if they want to succeed in the future?
Travel companies need to look at the total cost of payments, including costs related to foreign exchange. This aspect is often not thoughtfully considered and actively optimised.
To succeed on a global scale, it's important to enable not only card payments, but other payment methods as well. In certain markets, only a small percentage of consumers own international credit cards. They prefer domestic cards, bank transfer, or even cash-based payment systems. In order to tap into the full potential of these markets, accepting additional payment methods will be necessary.
Finally, compliance with new legislation should be a key effort this year for companies that aren't already prepared: PSD2 and GDPR come to mind.
How do you feel the shift to mobile has influenced payments?
The shift to mobile has encouraged consumers to spend. However, mobile shoppers are much more sensitive to any complication in the flow; they are much less likely to complete the payment if the process is cumbersome. Even being asked to enter the same information twice becomes a reason to abandon a purchase.
What innovations, shifts, changes in the payments world do travel suppliers and retailers need to watch out for? (e.g. eWallets)
eWallet is indeed a good example. The vast market and online offering for the travel industry has made meta-platforms such as travel search engines or marketplaces invaluable tools for every traveller. Making the purchase more frictionless for the consumer across multiple systems would be a significant market advantage for the operators of those tools. The ability for the consumer for example to pay for the travel “product” in one single payment step would clearly increase smoothness, trust and loyalty. Payment innovations such as a eWallet can facilitate this smoothness while maintaining security of payment data.
Delivering an omnichannel payment experience is also increasingly important. In certain markets, travel companies may need to consider accepting installments and "buy now, pay later" programmes.
And again, compliance with new legislation and regulations such as PCI and scheme rules is a constant effort.
Do you expect there will be other consumer behaviour trends that will dramatically shift payment behaviour? What do you think they will be?
Mobile has come to stay, and optimising the mobile payment experience is crucial. We also see a trend towards buying experiences instead of just trips, including add-on products. There's a lot of potential for suggestions based on data here. Increasingly short-term planning is also likely to affect payment preferences and behaviour.
There's also always a risk that new kinds of fraud and security threats will impact consumer behaviour. Travel companies need to constantly stay abreast of evolving security challenges.
What specific actions would you recommend for travel suppliers and retailers to take as they seek to improve their payment flows?
We strongly recommend that e-merchants in any industry offer payment options that are truly adapted to local needs and preferences in their target markets. We consistently see better conversion rates when local payment preferences are satisfied.
What advantages can a two-sided marketplace (e.g. Skyscanner) bring to the industry?
The first that come to mind are credibility, size, scale, and pricing. The search advantage, too — I love the Everywhere solution!
What are the highest priorities for travellers at the payment point?
Simplicity and transparency are key, with the lowest possible number of clicks to purchase. At the payment point, travellers also like to have an easy overview confirming what they are paying for, including travel dates and other important data. Because travel purchases are often relatively high ticket, it's also important for them to feel safe that the payment goes through and they won't miss their trip. The confirmation page is important!
Most travellers prefer a payment page in their own language. And as already mentioned, there are many markets where offering other payment methods as a complement to cards can make the difference between a purchase and an abandoned cart.