Most executives would agree on the importance of change and constant evolution for businesses to remain competitive. Yet when it comes to supplier payments, methods are based on habits with little progression in the approach.
NB: This is a viewpoint by Anthony Hynes, CEO and managing director for eNett International.
With an ever-changing travel landscape, it’s useful to keep in mind some everyday bad habits that are undoubtedly costing travel companies money and limiting growth.
Using credit as the default form of payment
Credit is the default form of payment for many organisations. But in today’s increasingly regulated financial landscape with stricter controls on lending, access to credit with favourable terms is harder to come by.
Travel companies often find themselves reaching credit limits, especially in peak season. Not only is this a nuisance, but also causes dynamic rates and immediate payment deals to be missed.
Does the value of credit outweigh the rewards you get through immediate payment discounts and rebates?
Passing-through customer cards
“Avoiding payment fees” by passing-through customers’ cards for payments to suppliers is still common practice.
But what about the customer experience? Aren't you passing that to the supplier when you pass through the form of payment?
What will it cost your business in terms of reputation if the details are used fraudulently?
It also means separately charging fees for your services rather than bundling them with the costs of travel. Customers could question why they are being charged twice, and be inclined to go direct next time - ultimately impacting your repeat business.
Always doing what you’ve always done
Too many travel companies are stuck doing things the way they do, because “that’s the way we’ve always done it”. Managing international payments is a great example of this.
Over-reliance on banks to manage FX and international transactions can see travel companies losing out by up to 3% on each international transaction, according to our own internal research. With so many innovative options out there, a little effort to look into alternatives can reap rich rewards.
Viewing supplier payments as a necessary evil
Paying suppliers is often seen as a necessary evil and nothing more. But adopting innovative payments solutions can streamline processes for cost and time savings, and generate tangible rewards on transactions.
Supplier payments can be transformed into a new revenue stream if travel companies are willing to break their habits and change their approach.
To find out how much bad payment habits could be costing your business, why not take advantage of eNett’s easy to use Cost of Payments calculator.
NB: This is a viewpoint by Anthony Hynes, CEO and managing director for eNett International. It appears here as part of Tnooz’s sponsored content initiative.
NB2: Image by rms164/BigStock.com
Related reading from Tnooz:
What’s the deal with travel industry payments? [VIDEO] (July 2016)
The true cost of travel payments (June 2016)