Amadeus to establish e-money subsidiary

Amadeus to establish e-money subsidiary

GDS's executive vice president of payments David Doctor will move from January 1 to head up Outpayce which will seek to connect the travel eco-system  

Amadeus has announced it will establish a new payments subsidiary having applied to the Bank of Spain for an e-money licence to provide more services in the European Economic Area.

Outpayce will be headed up by David Doctor as chief executive who will transition from his current role as executive vice president of payments on January 1 2023.

The e-money licence will facilitate the movement of funds between parties and to take advantage of Open Banking protocols to expand options and improve customer experience.

License holders can provide payment services such as accepting customer funds, issuing debit cards, or offering transfers of funds on a payment account. 

Doctor said it was decided to create a wholly-owned standalone company because regulators prefer payments services firms to have a focus on finance.

“From our perspective, the way we look at payment services and everything we do in that space, is the role it plays in the end-to-end travel experience,” he told Travolution. 

“As you go through the travel journey you have many different experiences, it’s all connected and payments contributes to that. We are very focussed on connecting the travel ecosystem because that’s our competitive advantage, being able to integrate into that end-to-end experience. 

“When you travel you are using payments across your journey at multiple touch points and we believe we have the assets to make that seamless. We can take out friction across the whole journey and connect it up all the way through. 

“We are making significant investment in this area. It’s a really interesting area and it’s an area where we can truly differentiate and, I think, bring some disruptive and great experiences to our customers.”

European Global Distribution System and tech giant Amadeus first established its payments division in 2012 to focus on technology like virtual payment cards and spent the first three years mapping out the services it could offer.

COVID saw it slow down development but with the travel sector now coming out of the pandemic it is looking to “industrialise” its financial services capability.

Since Doctor became head of the business payments unit in January it has almost doubled in size in terms of revenue and staff and intends to continue recruiting more talent. 

Doctor said Amadeus is scaling “quite aggressively” to provide smooth travel experiences by developing open APIs on its platform for customers and third-party developers. 

The first regulated service Outpayce intends to offer if the license is granted is pre-paid virtual card issuing in its B2B Wallet solution, which agencies use to pay providers. 

Outpayce issued cards will join a wide range of other options from partner issuers to provide travel agencies with greater choice and an improved payment experience.

“Fintech is a world of fremenies. We are building a strong eco-system of partners and we will continue to develop that,” Doctor said.

He added: “Today we connect up issuing partners for virtual cards for B2B payments. When agent partners go into their portal they can manage all payment methods according to what providers they use but they can’t see their financial data.

“They have to go into another portal of our issuing partner but once we have the licence thanks to Open Banking we can now show the data of other e-money and financial services companies like a bank does when you use an app and you can see accounts.

“This provides a better experience and the ability for our customers to manage third party services as well as our own services in one interface.”

The e-money licence means Amadeus will be able to do more than just orchestrate payments but offer a greater choice of options like bank-to-bank transfers and buy now pay later (BNPL) in the European Economic Area.  

Virtual payments methods will be the focus for Outpayce. “We do not intend to issue plastic. It’s not where we feel we can create a disruptive play,” said Doctor.

“What we want to do is create that wow factor when it comes to customer experience and we are looking to the digital world to do that and there are many use cases in travel, in B2B payments and the corporate world.

Amadeus will begin in the EEA before looking to apply for equivalent licences in other regions. 

“After the UK left the EU due to the Brexit referendum Outpayce won’t be operational in Britain until Amadeus applies for a licence from the Financial Services Authority.