Lee Hayhurst spoke to Trustly’s director of travel Mike Parkinson
Providing the right sort of payment options is now such a vital part of getting the customer experience right that it can be an engine for business growth and client loyalty.
According to Mike Parkinson director of travel at online banking specialist Trustly, travel firms risk being left behind in an era of payment type proliferation, wallets, mobile and new regulations.
Trustly’s 2019 insight paper ‘The New Way to Pay’ analyses the impact of Alternative Payment Methods, generational and regional trends and how security and speed are balanced.
Parkinson said: “The cashier is very much part of the experience now. It used to be very much an add-on at the end of the process.
“But today organisations are very precious about their customer experience and all the touchpoints associated with it and that includes payments.
“We talk about the Amazon of Apple effect – taking the path of least resistance. If you have the right payment type for the customer it leads to new business.”
Parkinson said Trustly’s insight paper was intended to “challenge the reader with what to what the industry challenges are”. “Are you prepared for the future,” he said.
“There is a shift towards new forms of payments so we have broken down what the successful ones are. Then we look at some of the changing dynamics impacting the industry.”
The rise of fraud but the need for speed, particularly a more mobile customer looking for instant gratification is identified as a major trend.
As is how regulation in Europe is introducing more competition in the finance sector with Open Banking protocols and legislation like the Payments Service Directive 2 (PSD2) reshaping the sector.
A deadline is looming this year for all firms to introduce two-factor authentication for all online debit and credit card payments as part of the PSD2 regulation.
Consumer research by Trustly found 73% of want more than just card payments at check out, while 31% abandon purchases because of a lack of payments options while 47% of merchants have seen payments operating costs increase.
“There are a number of moving parts that are all coming together in coming years and payments types which provide integrated consumer value, like wallets and bank transfers, are now compelling propositions. It all links back to the payments experience.
“Are you ready as a business for these changes, because these are the challenges. The travel and aviation sectors are laden with legacy systems and we have lots of conversations with clients about why they should be looking to diversify their payment propositions.”
Parkinson said OTAs and low cost carriers tend to be front runners in diversifying their payments options because they are more dynamic, faster moving and collaborative across divisions.
He said firms like Trustly which are providing direct connectivity to a broader range of payments types are taking out intermediaries and offering simplification and greater efficiencies for travel firms.
“It’s cost effective to look at other options away from credit cards. These are gaining significant traction. Merchants are now starting to incentivise different types of payment.
“Our platforms and systems run on the back of faster networks now. Investments in infrastructure like faster payments is all positive for the movement of money from bank to bank.”
And this improvement in the underlying technology is happening as consumer tech is opening up the possibility of using biometrics for payments like facial or fingerprint recognition, added Parkinson.
Parkinson added in this emerging world two fundamental will determine success for firms looking to progress their payments strategy.
“The first is user experience. In today’s mobile and app-centric world, consumers tolerate nothing less than a slick and seamless user experience.
“The second is consumer education. The travel and airline industry grew up on the back of credit and debit cards, with which adult travellers are all but universally aware.
“But consumers are demanding more choice, more speed, more scrutiny and more convenience, and are showing by virtue of sheer numbers that they have an appetite for an alternative to the mainstream.”
Download: The New Way to Pay