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.
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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
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.