As the travel industry continues its post-pandemic recovery, digital payment strategies have risen up the priority list for airlines. Kristian Gjerding, chief executive of CellPoint Digital, explains why Payment Orchestration is the best way to offer the right form of payments to global consumers and manage cross-border transactions
Guest Post: Why Payment Orchestration is the answer for turbulence free airline payments
Airline losses are expected to reduce to -$9.7 in 2022, a net loss margin of -1.2%. While that is a huge improvement from losses of $137.7 billion in 2020 and $42.1 billion in 2021, every little helps when it comes to getting the industry back to pre-pandemic strength.
Improving authorisation rates and reducing transaction costs - even by a few percentage points – are sure-fire ways to boost to operating margins.
But in the ever-evolving travel payment landscape, making these improvements means integrating multiple payment partners for optimal processing, routing, and settlement.
The good news is Payment Orchestration makes it simple for travel merchants to build a best-in-class payment solution and ecosystem.
Payment Orchestration unifies multiple payment capabilities and partners into one platform to optimise payment transactions across all channels and markets. It also streamlines data flows and automates back-end processes.
Here are 10 ways Payment Orchestration can help airlines take back control of their payment strategy and quickly implement the right mix of payment methods, PSPs and acquiring banks – all while eliminating friction at checkout time for the customer.
Increase authorisation and conversion rates
A Payment Orchestration Platform overcomes many of the factors that limit authorisation rates, so your airline can accept more payments and convert more customers.
At the front end, offering the payment methods customers prefer, and payment functionalities like one click-payment or split payments, improve conversion during checkout. At the back end, optimising the routing of each card transaction and using intelligent fraud screening boosts authorisation rates even further.
Reduce average payment transaction costs
Dynamic and intelligent transaction routing uses the optimal acquirer for each location to minimise interchange costs. A Payment Orchestration Platform will enable you to deploy a local acquirers strategy and reduce cross-border transaction traffic, optimising the routing of each transaction based on cost and acceptance rate.
Routing your card transactions to a limited number of acquirers can lead to high transaction fees and sub-optimal acceptance rates; Payment Orchestration allows you to expand your acquirer network and route each transaction to the right acquirer.
Take back control of your payment strategy
Many airlines outsource payments to a single PSP or the payment gateway of their PSS provider, assuming that a single vendor relationship will be simpler. But PSP or PSS providers may not share your priorities or support your markets. This makes modifications cumbersome and costly.
A Payment Orchestration Platform means you don’t have to rely on third-party providers, but can still avoid the need for in-house development. You determine your own payments strategy and can move quickly to execute it.
Bring new payment methods to market faster
Payment orchestration dramatically accelerates the roll-out of new global or local payment methods, whether they're card-based or alternative payment methods (APMs). Pre-integration is managed within the payment ecosystem connected to the platform itself. Put simply, a Payment Orchestration Platform allows you to rapidly select and switch on the payment methods that meet travellers' preferences in international markets.
Give your customers a frictionless payment experience
No matter what we’re buying, we’ve come to expect frictionless payments. A Payment Orchestration Platform can help you deliver a consistent, seamless payment experience across all channels and make abandoned transactions less likely. By giving customers the payment methods and currency they prefer, one-click payments using stored cards, more discreet fraud checks, and the ability to easily resume the checkout process if interrupted, Payment Orchestration helps maximise conversions.
Automate your back-end finance processes
Automated payment reconciliation and chargeback management eliminate time-consuming and cumbersome manual processes. A good Payment Orchestration Platform automatically receives settlement files from multiple PSPs and acquirers, standardises the data formats, and reconciles all cards and alternative payment methods transactions, identifying any issues in the process.
It can also automatically analyse chargeback requests and prepare files to dispute the fraudulent ones. With a Payment Orchestration Platform, the complexity of working with multiple PSPs or acquirers doesn't reach your back-end services; in fact, they're simplified.
Simplify and modernise your existing payment systems
The conventional approach to managing payments is too often tactical rather than strategic. That means new payment methods or functionalities are integrated channel by channel, as needed.
Time-consuming manual processes are still the norm. Payment Orchestration Platforms, on the other hand, reduce this complexity. They manage multiple payment partners, offer efficient and modern integration layers, unify payment processes and break free from legacy system constraints that are holding airlines back.
Extract maximum value from your data
Without a Payment Orchestration layer, customer and transaction data can be fragmented across systems, PSPs and channels. This makes them hard to analyse and manage.
When airlines get a unified view of all their payment transactions, regardless of the channel or payment partner involved, they can select the right payment partners, optimise processing in real-time and personalise the customer's payment experience.
Enhance fraud protection
The right Payment Orchestration Platform combines advanced pre-authorisation screening with several fraud systems and rich customer data to enhance fraud detection.
This kind of intelligent fraud capability speeds up the payment process for returning customers by eliminating unnecessary verification and reducing the burden on your internal fraud mitigation teams.
To be PCI-compliant, airlines must comply with all PCI guidelines, in all their channels, and pass a comprehensive annual PCI certification process. Having a Payment Orchestration Platform allows airlines to transfer the burden and liability of PCI compliance directly to a Payment Orchestration partner.
For airlines looking to accelerate their post-COVID recovery, Payment Orchestration is by far the best way to simplify and modernise the payment processes. By connecting with the right partner, they can optimise their payment strategy in a matter of months.