Q&A: Worldpay's Thomas Helldorff on challenges, trends and predictions for travel payments

Worldpay is one of the largest payment providers in travel e-commerce. The company works with brands such as Airbnb, Expedia, eDreams Odigeo, Amadeus, Emirates, Sabre, British Airways and United Airlines.

Across all of its customer categories, Worldpay processes more than 40 billion transactions annually, supporting more than 300 payment types across 146 countries and 126 currencies.

Since 2013, Thomas Helldorff has been Worldpay’s vice president of vertical strategy for travel and airlines. Prior to that he worked as head of airline strategy and innovation at DataCash, and before that he was senior product manager of payments and mobile at SITA.

We asked Helldorff to share his thoughts on travel payments, including the role of mobile and alternative payments, how payment systems can drive conversions and what the future may hold.

What have been some of the most noteworthy developments related to payments in the travel industry in the past few years?

The payment landscape in the travel industry has changed quite significantly over the last few years. The most important development is mobile payments. Travel companies have transformed the entire booking experience they offer to their customers via mobile.

Today’s travelers are extremely keen in completing the entire booking and payment process on a mobile device. Actually, 82% of travel bookings in 2018 were completed via a website or mobile app, without human interaction.

Social commerce has also grown tremendously in the travel sector. Travel is one of the most shared topics on Facebook, Twitter and Instagram. Several travel companies have realized the power of social media and are starting to offer the entire booking process through social media platforms.

Invisible payments ‐ when payments are triggered automatically, without the customer having to do anything ‐ are really popular in the travel sector as well.

For example, when you take an Uber, you just have to put your payment details in the app once, and the payment for your journey is taken “invisibly” once you arrive at your destination.

Finally, Strong Customer Authentication (SCA) ‐ the new European regulation to reduce fraud and make online payments more secure ‐ will affect tremendously the travel sector.

Travel companies have started building additional authentication into their checkout flow in order to accept payments once SCA goes into effect. SCA requires authentication to use at least two of the three elements (something that the customer needs, has or is).

What can consumer‐facing online travel brands do from a UEX perspective to stop customers abandoning a booking during the payment process?

In Worldpay, we have identified seven stages in the online payment journey that can be optimized to increase booking conversion. These are the homepage, shopping basket, user profile, payment page, error handling, payment confirmation and support tools.

Firstly, companies should reassure users that their website is a secure place to make their purchases. According to our research, 53% of online shoppers surveyed said they would more likely buy from a website if it displays payment authentication and digital certificate logos.

Digital currencies will grow significantly in the travel industry, while chatbots will play a crucial role in the booking and payment journey of a traveler...

Thomas Helldorff - Worldpay

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Regarding the shopping basket, companies must ensure that their customers know how much to pay in their local currency and feel comfortable booking on their website.

Travel companies must also promote user profiles, as these allow shoppers to store their personal details to make future bookings seamless and hassle‐free. In reality, though, user profiles are not commonly used when booking travel.

Moreover, companies should only show the payment methods they actually accept on their homepage. In our research, we identified that 61% of potential customers would drop out of the checkout because the payment method they were expecting to use after seeing it on the homepage was not available when they reached the checkout.

Regarding error handling, travel companies should pre‐populate data that was filled in previously where possible to help prevent payment errors leading to abandoned bookings. To optimize the user experience, travel brands should also reassure their customers with immediate payment confirmation.

Finally, it’s important for travel brands to support their customers by providing answers to payment questions in the customers’ preferred support tools to ensure more complete bookings.

What are the challenges/roadblocks that may keep some suppliers from offering alternative payments?

Offering alternative payment methods (APMs) can be a great way to increase reach and acceptance in a particular market. The main challenge is that the existing legacy distribution infrastructure in the travel industry is not optimized for non‐card payments (i.e., GDS).

Alternative payments often do not follow the same payment flow as traditional payment methods. So, airlines who want to offer them have to ensure that their back‐office, reporting and customer service processes are considered and that their down‐stream partners are able to adapt to the different flows.

Where airlines accept them, they need to ensure the payment method supports all of the operational requirements, e.g., they can be automatically refunded – a use case often needed in the airline world.

What is the most common question or issue regarding payments that you get from travel companies?

We are working with the world’s leading travel companies; in 2018 we had more than 120 travel customers. The most common questions our travel merchants ask us are mainly regarding how they can improve their performance by optimizing their cost and acceptance rates and how they can protect their business from fraud.

Also, they want to identify which is the most suitable payment method they must offer when they are expanding into a new market. With the increase of m-commerce (mobile commerce), many of them ask us how they can build a seamless payment experience for their customers.

Is there a particular part of the industry that you think is perhaps lagging behind when it comes to advances in payment technology and processes?

The hotel industry is struggling to keep up with the technological developments in the payment industry on the grounds that traditionally in this sector, payments occurred at the property level.

This system doesn’t allow for a seamless (mobile) booking and payment experience across a hotel brand, while it is much more difficult for the hotel to scale and optimize payments.

Do you think cryptocurrency is a viable option as a payment method for travel? What are some of the pros or cons?

We haven’t seen many travel companies actually accepting cryptocurrencies as a payment method. Expedia, for example, was one of the first online travel agents that started accepting Bitcoin for hotel payments in 2014, but in the summer of 2018 they stopped accepting it.

In addition, many of those who actually do it, use exchanges to immediately convert the cryptocurrency into a stable fiat currency in order to avoid currency fluctuation.

We do, however, believe that the underlying technology (i.e., smart contracts and distributed ledger) have the potential to change how players in the travel industry pay each other (B2B approach).

How should a brand prioritize what types of payments it should offer?

It depends on the brand’s aim and target audience. If they target customers from different countries, they need to offer APMs that tailor to the local preferences.

For example, in 2018, iDeal - the online payment method that enables consumers to pay online through their own bank ‐ had a market share of 57% in the Netherlands. So, when you are an online travel agent that’s active in the Netherlands, you can’t go around without offering iDeal.

Moreover, brands must choose what kind of payment methods suit their business model. For example, the majority of travel companies need an automated refund process - something that not all APMs can offer.

Do you have any hesitancy about storing your payment information in a travel mobile app?

Over the last years, the discussions regarding the storage of customers’ personal and payment data has increased, and customers are more aware of this than ever before. Travel companies should look to balance two important factors regarding the payment process when they choose their m‐commerce strategy: speed and security.

Tokenization is one solution to both of these factors as it allows travelers to securely store their payment data. A user can have an account with a travel agent and store their personal information and payment details there in advance.

Worldpay offers tokenization by providing a secure token - an algorithmically generated number ‐ to the merchant every time a payment occurs; therefore, the users don’t have to put their details every time they make a purchase. These tokens can then be passed through the internet or other networks to process the payment without the actual bank details being used.

So, we highly recommend travel companies not actually store the customer’s account details and the payment information, but always use a token provided by the payment provider as we do in Worldpay.

What are your predictions for payments in the next five to 10 years?

It’s really tricky to predict the future in the payments industry, taking into consideration how many changes we experienced in this field over the past decade. Just consider that Apple Pay didn’t exist five years ago!

So, I would say first that as more and more businesses of all sizes accept mobile payments, NFC mobile payments and mobile wallets will take over the market and consumers will steadily shift away from the need to carry a physical card with them. In fact, it is estimated that contactless payments will continue to grow at more than 100% in Europe.

I am almost sure that new regulations (like PSD2) will be enforced by countries in order to control the payments landscape and protect consumers. Biometrics (like facial, voice and hand‐movement recognition) will be used to a greater extent by banks and fintechs to win over in the customer experience battle.

Digital currencies will grow significantly in the travel industry, while chatbots will play a crucial role in the booking and payment journey of a traveler taken into consideration that today 69% of travelers said they have used voice search while planning a trip.