Amadeus is establishing a separate payments business called Outpayce for its B2B payments as well its merchant services.
While the company has been developing payment technology for about 10 years, it feels it can do more in the area via a separate business and has applied to the Bank of Spain for an e-money license covering the European Economic Area.
The license will enable Outpayce to extend its payment handling capabilities to open banking, facilitating payments between payer and merchant and issuing payment methods.
Amadeus executive vice president for payments David Doctor will become CEO of Outpayce when it is established in January. He says the business is expected to be a significant revenue contributor and is being viewed as an investment from a business perspective as well as from a customer service perspective.
"The payments business is a big opportunity in terms of travel. When you look at travel payments themselves, the market - depending on the vertical but just the airline and hospitality markets alone - you're talking about $18 billion worldwide in terms of addressable market in payment services so it's an interesting market," he says.
Doctor says setting up Outpayce is about "industrializing" its services, improving the experience for customers and expanding what it already offers.
"We have been looking at it from our technology DNA and how can we deliver smooth, connected payment experiences to our customers and their travelers at every touch point along the journey. To fill that strategy we've been looking at first, how do we integrate with the overall travel ecosystem and touch points? And second, how do we make accessible all those innovations happening in the fintech world accessible to our customers through our payments platform."
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Doctor describes it as "tech-fin" as opposed to fintech and says the new entity will always focus on payments with no plans to extend into other areas of fintech.
He adds that an e-money license will also enable the subsidiary to issue virtual payment cards.
Other GDSs have ventured into payment services in the past with Travelport forming eNett in 2009, a joint venture with PSP International. The company steadily built up its ownership of eNett to more than 70% five years later.
It then announced the sale of eNett to Wex in early 2020 at an original price tag of $1.7 billion in a deal that included virtual card issuer Optal.
The deal collapsed during the pandemic, however, only to be finalized at the end of the year and following a lawsuit, with Wex agreeing to pay $578 million.
More recently, Sabre acquired Conferma Pay to help it advance virtual card payments in travel.