Lee Hayhurst spoke to Aran Brown, chief executive of a British success story in the travel payments sector, about its expansion plans
British payments optimisation firm Ixaris is poised to enter the US market having agreed a partnership with Sabre Corp, the leading GDS and technology provider in the states.
Having built its proposition as a travel specialist, Ixaris says its focus is on diversifying its business both geographically and in terms of the range of products and services it offers.
Aran Brown, who was appointed chief executive in January last year, said Ixaris will continue to target its core OTA sector but that tour operators, offline agents and TMCs are also on its radar.
Founder and former chief executive Alex Mifsud retains an interest in the business and has a strategic role having founded Open Payments Cloud which is fostering collaboration in the sector.
Brown said one of two key aims for Ixaris this year is to expand its footprint outside of Europe where is had achieved significant growth through its close relationship with leading GDS Amadeus.
“We have always had a good presence in Europe supported by Amadeus but there are many large OTAs outside of Europe, particularly in the US.
“We have fairly aggressive geographical expansion plans for 2019, starting in the US. We are hoping to be in the US by the middle of this year.
“That will follow a very similar strategy as we have in Europe. We will continue to support GDSs but also go direct to some of the OTAs, as we do here.”
Brown said the next region in Ixaris’s sights is Latam in the fourth quarter of this year.
“We consider ourselves as an optimisation payments business focussing on travel. We definitely have very good traction focusing solely on OTAs.
“When we expand geographically we always have OTAs in mind as potential consumers. We are seeing continued year on year increases in consumer spend via OTAs.
“And because since day one of OTAs profit margins have been razor thin the successful ones like Expedia and Booking.com are doing billions of virtual card transactions.
“And payments actually acts as a profit centre. OTAs that do not manage payments properly are really missing out.”
Virtual cards are being increasingly used by firms to pay suppliers because they allow them to avoid certain charges, optimise foreign exchange and drive an income stream from card provider rebates.
Although OTAs have been the quickest to seize the opportunity, Brown believes other sectors within travel could also benefit from optimising their payments processes.
“We are starting to look at the broader opportunity with tour operators, TMCs and the smaller non-online travel agents. We are definitely starting to diversify the business.”
The second key priority for Ixaris beyond geographical expansion, added Brown, is to “really nail down” how payments can be optimised by travel companies.
“We see with our competitors that they provide virtual cards to OTAs, which is great, but it’s only one or two products. It does not really fully optimise payments flows,” he said.
Brown said offering multiple payment options means firms can intelligently opt for the right kind of payment to each supplier for the right kind of transaction in the right territory.
“It’s about providing OTAs with as many products that focus on acceptance. A lot of firms focus on rebates, but more important is acceptance.”
Ixaris believes its relationship with the leading GDSs is what sets it apart, giving it wide distribution and providing a service through its partners which they are not providing.
The only big three GDS Ixaris does not currently partner with is Travelport, which has its own payments division eNett.
Brown said: “The role of GDSs and payments are coming together. GDSs are starting to see payments as a natural extension of their business.
“Payments is an extremely regulated type of business. Of course, GDSs could wake up one morning and say I would like to become a payments business.
“But the reality is having the licences, the memberships with the payment schemes, the technology and the expertise, it’s a very different business from traditional GDS business.
“They will always have to rely on Ixaris, if the economics are right.”