Can payments help lagging airlines catch up to fliers' mobile-first behavior?
By Alex Samuely
April 11, 2016
Airlines must adapt with the times
As the aviation industry continues brainstorming new ways to reach travelers and keep up with demand for mobile-first services, investing more heavily in digital payment options could help cement a win in the battle against online travel agencies.
With more than half the world set to own a smartphone by 2019, companies must do the appropriate legwork now to ensure that they offer all common activities, such as banking, purchasing and booking, on mobile devices. Airlines in particular should place a greater emphasis on exploring all mobile payment methods and integrating them into their existing sites or apps, especially as they fend off rising competition from online travel agencies.
It won't be long before nearly all airline passengers' payments and transactions with airlines will be conducted on mobile devices, said Kristian Gjerding, CEO of CellPoint Mobile. If airlines are not able to bring new payment solutions to market quickly, they're losing valuable revenues, they're lagging the mobile-first behaviors and preferences of their passengers, and they're giving up a competitive advantage to airlines that are embracing and deployment passenger-centric mobile payment solutions and mobile wallets.
The opportunities for airlines that deploy mobile payments quickly, however, are enormous, he said. Airlines can create new revenue streams for passengers as they travel, including tickets and fares in the direct channel, and ancillary revenues throughout the journey.
According to eMarketer, up to $762 billion in digital travel revenues will be up for grabs by 2019, and airlines that can accept, process and transact revenues in the mobile environment have a competitive advantage over those that are lagging. By some estimates, airlines can capture tens to hundreds of millions in additional revenues simply by deploying mobile payments for their passengers. They can turn lookers into bookers by making it easy to pay, regardless of device, currency or channel.
Airline brands should first hone in on selecting the right payment methods to implement into their digital offerings with the biggest emphasis on those that will yield the most revenue potential. The next step is ensuring that all mobile experiences are as frictionless as possible.
The proliferation of booking apps and OTAs, such as Expedia and Orbitz, has made it more difficult for airlines to drive direct mobile traffic to their sites or apps, particularly among consumers who enjoy comparison shopping with multiple brands.
Apple Pay has made it on-board to several airlines' aircrafts
Therefore, to make the experience more streamlined for current and new users, marketers must offer seamless payment options that will not frustrate customers and prompt them to leave the app or site experience.
This means that airlines should offer support for Android Pay, Apple Pay, Samsung Pay, Visa Checkout, MasterPass and Amex Express Checkout, among others.
Per Mr. Gjerding, airlines see higher acceptance rates and fewer cancelled payments when passengers payment details are securely stored and connected across channels.
If airlines feel they cannot complete these tasks on their own, teaming up with third-party innovators and solution providers may help them stay afloat in the complex mobile ecosystem.
One potential upcoming trend that the aviation industry may experience this year is an influx of vendors offering airline-branded mobile wallets. This could be a useful feature for frequent fliers with plenty of rewards memberships.
Another paramount trend will surround security. New technologies such as fingerprint identification, facial scanning, voice recognition and biometrics will likely be integrated into mobile payment options to prevent fraudulent activity, which could sway consumers to feel more comfortable booking flights on their smartphones.
Biometric authentication will continue gaining speed this year
The old way of easing travel payments was a frequent traveler program that stored card data and points balances, said Daniel Farrar, CEO of Switchfly. The new way involves biometric data, pin, NFC, and even selfies to authenticate and keep payment data secure.
At our recent Thought Leaders Summit conference, industry thought leaders showed that mobile native apps are losing share to responsive Web. We see this native app decline as posing a big challenge for suppliers who want to link mobile-specific data that enables secure payments (thumbprints or selfies) with our travel loyalty clients legacy profiles such as frequent flier/frequent guest programs and their huge user bases.
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