As recently as 2022, 68% of travel purchases were made online and with volumes approaching pre-pandemic levels, that number is sure to increase. A Trends Global Survey indicated that 80% of respondents felt it important to be able to book travel entirely online. Travel businesses strive for a seamless and easy online purchasing experience as any hindrance or inconvenience may cause ‘cart abandonment’. One of the more complex parts of the online purchase is payment processing and travel businesses are poised to invest more this year to adopt better payment technology to address current and potential challenges. The travel industry has always been on the cutting edge of technology but competition in the marketplace is fierce and global economic conditions leave more questions than answers. Travel businesses want their clients to have zero impedance when making purchasing decisions and innovating in the payments side can maintain that seamless experience.
Challenges and Opportunities in the Backend
Fast payment processing consists of different technologies and platforms that must communicate with each other to complete the transaction. As payment technologies evolve to offer more value or access to consumers, so does the infrastructure travel businesses need to offer an efficient payment system. Some of the key challenges facing the travel industry when it comes to payment processing that were mentioned in a recent Outpayce survey are:
- Cost of integrating new payment technologies into existing platforms
- Establishing the technical infrastructure to connect to new and alternate payment methods
- Efficient and accurate processing and routing cross-border payments
- Keeping up with new payment method trends and technologies
Some opportunities for travel businesses within the realm of payment processing are acceptance of ‘virtual credit cards’, a newer product available from Mastercard and implementing ways to accept cryptocurrency as payment, digital assets that are becoming mainstream as a global currency.
Elevating the Online Purchase Experience
Ultimately, it’s the travel client that makes the purchasing decision and some of the challenges facing travel businesses when it comes to payment processing are consumer facing. ‘Cart abandonment’ is an industry term referencing when a user adds items to their cart but abruptly ends the transaction for any number of reasons. For online shopping, more than two thirds of carts are abandoned and it’s up to businesses to offer easy to use and uncomplicated payment interfaces that ensure smooth follow through from the client. This is even more important for the travel industry because of the emotionally driven nature of leisure travel. Payment technologies that reduce the number of clicks, screen redirects and popups are better positioned to provide seamless and hassle free purchasing experiences. Clean and easy to use online and mobile input layouts are also crucial in simplifying the payment process for the traveling consumer.
Optimizing Payments is Good for the Bottom Line
Travel service and product providers depend on payment processing technology for business operations and companies fully understand that the ‘travel experience’ begins at the purchasing event. Adopting the latest innovations in payment technology to elevate the customer experience may increase conversions and reduce cart abandonment. Improving or enabling cross border / cross currency acceptance may also increase revenue within additional demographic regions. Newer innovations can allow for micro-financing and layaway type transactions that may positively influence the purchasing decision. Improvements and innovations in backend technologies can save both time and money and reduce instances of fraud with hyper accurate and secure transactions that are designed to identify tell-tale signs of fraudulent activity. Communicating security protocols and processes can also build confidence within the individual consumer and may sway the purchasing decision.
The Final Leg of the Purchase Journey
Online purchasing experiences are very different from in-person engagements. Data from Statista indicates that 70.13% of initiated online purchases result in ‘cart abandonment’. This would suggest the online consumer has much less patience and much less attentiveness than the typical bricks and mortar customer. The online purchasing experience will directly influence whether that ‘buy’ button clicked and travel businesses want their clients to have the smoothest and hassle free experience possible. Evolution in payment processing is driving the travel industry to invest more resources in ensuring the payment process part of the online transaction is fast and convenient. New methods of payments, layaway and micro financing, the shift to virtual credit cards and cross border / cross currency transactions are some of the biggest opportunities for travel businesses. Enhancing the online shopping experience can move the needle when it comes time for the travel client to click ‘buy’.
Sources:
https://www.travelperk.com/en-ca/blog/online-travel-booking-statistics/
https://www.phocuswire.com/outpayce-travel-payment-experience-challenges
https://www.statista.com/statistics/477804/online-shopping-cart-abandonment-rate-worldwide/