The travel market is flourishing currently, and it’s only expected to see a substantial increase in revenue in the following years. According to Statista, online sales will account for 76% of overall revenue in travel and tourism by 2028, and the revenue will reach £746.4bn. The mobile travel booking industry is expected to see significant growth in particular, particularly reaching an impressive value of $612.5 billion by 2031, and the reason for this is related to a general worldwide increase in disposable income and the growth of online booking platforms, including mobile-optimized websites and mobile travel booking apps.
This travel bookings explosion raises the question of travel payments- how will individuals pay for these bookings? Will the available technology make a difference? And how can travel companies ensure they can secure customers in such a dynamic landscape? In the article below, we will take a look at what travelers expect regarding payments, what challenges companies face in this modern landscape, and the solutions to meet customers’ expectations, so keep reading to learn more!
Travelers Require Innovative Payment Tech
Technology has changed travel in many ways. Travelers these days no longer have to worry about how they will stay connected when going abroad because they can now access solutions like eSIM UK. Furthermore, they want to travel cashless and have everything they need for their adventure conveniently in their pocket – even their preferred payment option.
Most consumers prefer digital wallets such as Google Pay or Apple Pay when paying abroad, and that’s due to the convenience these solutions provide – all you need to do is tap your phone, and you can pay for your groceries, coffee, and more.
Given that contactless payment methods have gained more popularity, travelers want to be able to use their mobile wallets as well as contactless cards on the go, and this demand has resulted in the global adoption of contactless payment infrastructure, particularly in tourist-heavy regions. They are outlining payment modes that are favorable and employed throughout the globe, such as Mastercard or Visa, and they even ask if they can use cryptocurrency, such as Bitcoin, to book hotels, flights & travel expenses.
All of this and more in travelers’ wishes just demonstrates the power of technology in today’s society—the key question is whether organizations are able to meet these increasing desires.
Top Payment Processing Challenges Businesses Face and How to Overcome Them
Travel companies are situated at a crossroads of innovation and complexity in the world of modern travelers. While travelers will engage with their desire to visit exciting new places, travel companies are burdened with many challenges as it relates to payment processing.
Security Issues and Fraud Risks
The rise of “online transactions” has increased the risks of fraud & security breaches. The “travel industry” involves high-value transactions & large amounts of customer information, so it is a tempting target for bad actors. Lack of good payment protection policies comes with a lot of negative consequences, such as identity theft and stolen credit card information, to name a few. The solution is to require two-factor authentication to add another layer of security to prevent unauthorized parties from accessing sensitive information.
Transparent Payments and Dynamic Pricing
In the “travel industry,” pricing is dynamic, as live inventory & pricing are moving transactions for processing payment. Customers are asking for pricing transparency, & any surprising price variances, surcharges, or pricing below their expectations can create customer upset and damage customer experience. How can travel companies provide customers with a better payment experience in today’s variable pricing environment? As always, the answer is innovation.
Specifically, travel companies should invest in systems that can revise their pricing in real time, and charge customers accordingly, using real-time data accuracy with transparent pricing from the time of booking and throughout the total customer payment experience. Next, travel companies should, from the very start of the booking process, clearly inform customers of any pricing changes (fees, taxes, …), because the total customer experience and satisfaction foster trust and build loyalty.
Integration with Emerging Tech
Rapid technological development presents myriad opportunities and challenges to the travel industry. With new technologies, such as artificial intelligence, blockchain, & machine learning, adapting and changing the methods of processing payments presents ample consideration & strategies. Blockchain provides transparency and security to payment transactions, thus lowering the chance of fraud in financial dealings, including payment transactions.
Machine learning (ML) and artificial intelligence (AI) assessments can essentially improve fraud detection systems via pattern identification, anomaly detection, and threat adaptation, thus giving an additional proactive security dimension.
Regulatory Compliance and Legal Complexities
Given the worldwide nature of the travel sector, it comes with considerable regulation and differing legal frameworks. For travel companies, promoting compliance with all of the laws can be difficult, and noncompliance can lead to liability, fines, and reputational risks. An important key point is that travel companies can benefit from the utilization of an attorney who has experience with international payment laws and regulation to ensure that they can promote a compliant payment process.
Periodic compliance reviews can also help facilitate the identification of changes or gaps in regulating compliance to ensure that they are ahead of compliance rather than simply “in compliance” if and when changes in law take place over time.
Infrastructure Reliability and Scalability
In the travel industry, demand is often unpredictable, particularly when it comes to busy seasons or special events. Companies depend on a payments processing solution that can accommodate spikes in transaction volume while remaining efficient and reliable. How is this so? In the end, cloud-based payment processing solutions are incredibly useful because they provide scalability and flexibility as transaction volumes increase during busy periods while preserving the quality, reliability and convenience that a customer would expect while conducting their payment experience.
Moreover, redundancy and failover capabilities within payment systems create an environment where payment processes can remain unaffected during quality or technological inefficiencies, including potential hardware failure.
Also Read: Payroll Software for Small Businesses to Simplify Payroll Management
Collaboration and Interoperability
The travel industry is a complex system consisting of various service providers, such as airlines, hotels, travel agents, and payment processors, cooperating to make the payment process as easy as possible. The ecosystem would encounter issues if one of the many payments fails for some reason or another, as inefficient communication or integration on the back end would cost money, time, or operations.
There are several solutions available to decrease this friction. For instance, utilizing standard protocols enables the seamless interoperability of all components of the “travel ecosystem” with one another so that information may transfer freely across “travel information systems.” Additionally, establishing solid partnerships between “payment processors & travel service providers” can enhance communication and interoperability and facilitate a smoother payment processes.
The Bottom Line
Whether travelling for what it terms business or leisure , travel companies of all types would benefit from the ability to adjust to new technologies with a view to offering the strongest level of transparency and security to travelers with regards to the payment process. By dealing with the most common challenges outlined above travel companies can be more efficient in their payment processing and, at the same time, enhance the travel experience to what we have referred to on a global basis.
