Mobile is Transforming the Travel Sector – So What’s a Merchant To Do?
February in South Africa means long, hot days, and seemingly endless sunshine (interrupted only by the occasional thunderstorm). Temperatures often top 30 Celsius (that’s mid-eighties for my American friends) and nearly every day is deserving of a braai (that’s barbeque for the rest of the world). But I do spare a thought for my colleagues and friends in Boston, New York, Munich and London (amongst others) at this time of year, as they slog it out through the darkest and coldest months of winter. Who’s to blame them for seeking a bit of light escapism as they plan and book their spring and summer vacations?
For many travel operators, as well as airlines and hotels, these frosty winter days are their ‘peak’ – a time period that demands careful planning, and ongoing vigilance in the face of fraudulent activity (much like Black Friday and Cyber Monday for other sectors). But the challenges for merchants in the travel sector are compounded by the fact that the way in which we plan and book travel has changed so dramatically in such a short period of time.
Mobile is transforming the way that consumers plan and book travel
In 2014, around a quarter of leisure travelers used their smartphone to book travel, up from only 15% in 2013.1 But when it came time to book and pay, the PC was still the device du jour. By 2015 that proportion had grown to 31%, according to Google, with 54% of business travelers having booked travel on their smartphone. Since then, the trend toward mobile has continued, in part driven by improvements in both native apps and mobile websites that have accompanied ever more powerful smartphones.
But these improvements do not take place in a vacuum – they are driven by consumer desire for convenience, speed and simplicity. Merchants in the travel sector therefore need to focus on delivering a smooth checkout and payment experience via their native app or mobile-optimized website, otherwise they risk cart abandonment. This means offering one-touch payment, a range of suitable payment options (including mobile wallets) and a suitable mobile fraud strategy that lets through genuine shoppers. Due to the complexity, we are seeing merchants turn to their PSPs and technology vendors to meet the demands of their customers.
There are more customer journeys when it comes to planning… journeys
According to Google, 94% of leisure travelers also switch between devices as they plan or book a trip, and it’s not as simple as “research on mobile, book on desktop.” There are many potential customer journeys that travel marketers need to account for, and can influence the final purchase decision – and they need to be able to process the payment wherever and whenever the consumer makes that decision.
Cross-channel visibility and data integration is of critical importance, especially as travel planning and booking permeates more of our mobile experience. From review sites (TripAdvisor etc.) to social media (such as Instagram) and tools such as Google Maps, a huge number of the apps we use and websites we visit can influence the purchase decision. Video marketing also plays a huge role – and virtual reality (VR) is waiting in the wings.
Those merchants that can integrate data and provide a smooth and seamless experience across platforms – allowing consumers to start a booking on one device and finish on another – are going to enjoy a bigger slice of the pie.
There are demographic forces as work too. According to research completed by Hipmunk, half of millennials describe themselves as “travel hackers,” meaning they know all of the best sites and methods to get the best travel deals. Meanwhile, only 26% of gen x-ers and 12% of baby boomers share that sentiment. Their mobile devices are at the core of this comfort with planning and booking online.
What’s a merchant to do?
Competition is particularly fierce in native apps, where growth outpaces that of mobile websites. The convenience of one-touch booking (based on stored payment details) and highly personalized experiences enable the kind of seamless experience that consumers are demanding. Payment providers are increasingly able to equip their merchants with tools that help them achieve this – such as mobile software development kits (mSDKs). Merchants should carefully evaluate the capabilities of these technologies, and ultimately work with those that are developer-friendly, saving them time and development effort, and also secure, reducing fraud but still letting through genuine shoppers. In addition to offering simplicity and security, solutions also need to be global by default – the travel vertical requires the ability to sell in countries all around the world, supporting an array of local payment methods that reduce friction. And technology that ticks these boxes should leave merchants some time to plan their own vacations, when the winter ‘peak’ has subsided…
Oh, and did I say South Africa is a great destination at this time of the year?
Related blog posts
SleepAtNightability – Why We Must Not Forget The Fundamentals of Payments
When I saw this quote on Twitter, I literally LOL-ed, mainly because it’s so true (thanks to James Wester & Sam Maule). Indeed the ’boring’ in payments exists for good reason; when it comes to peoples’ money, you can innovate, but you cannot forget the fundamentals. The basics may be boring, but the lesson there is that they are vital.
Open payments require collaboration
There are a few things in my life I enjoy more than the serenity of a garden. There is nothing more fulfilling than starting off with something as innocuous as a planted seed, only to watch it bloom during the course of the spring and summer, and end its journey in a bounty of produce. As anyone with a green thumb would tell you, it’s not just the quality of the thing you start with, but the care and watchful eye you give it along the way; when to water, when not to, when to weed, when the seedlings may need cover from a pending cold snap, and when you just need to let nature take its course.
Regulating the Payments Ecosystem Transformation
New banks, new payments players, new choice. The competition is heating up in payments, with both incumbents and those new to the scene, vying to emerge victorious.
Payments Buzzwords Bingo: Mid-Year Report Card
Summer is in the air (and it’s 95 degrees this week!!). As we move properly into ‘flip-flops and shorts’ season in the North East, it’s about that time to check in on our annual calls from the New Year (and begin to look forward to counting down to the next set of predictions). Hard to believe that 2017’s Christmas is now closer than 2016’s, but so goes time, and nobody can slow that down. So without further ado I give to you… the mid-year trends update!
Addressing Millennials and Their Influence within the Payments Industry
Generational changes are a reality that affect all of us, and bring with them variations in behavior. We are currently experiencing one of these generational changes, which has also brought with it challenges for the payments industry. The nearly 2 billion millennials that now inhabit the earth have entered into adulthood (in some respects at least) and will soon become the generation with the greatest purchasing power.
The ATM Turns 50: Does Retirement Beckon? Or Does A New Role in the Payments Ecosystem Await?
This year marks the 50th birthday of the Automated Teller Machine (ATM), with the first one installed in London on June 27, 1967. Five decades on, and there are more than 3 million ATMs deployed worldwide, with the ATM Industry Association (ATMIA) citing research that calculated that a new ATM is added to the global installed base every three minutes. I spoke with Andy McDonald, vice president of Merchant Payments at ACI Worldwide, who has more than 20 years’ experience in the payments industry, much of it focused on ATMs. Who better to provide insight into whether ATMs have a well-earned retirement awaiting, or if we’ll still be using them (in one form or another) in 50 years’ time?
Top 3 Things Students Want When Paying Tuition
I know the pain that Finance VPs in higher education experience. It seems like every day that someone comes to you saying “Our students need new technology. Can we squeeze it into the budget?” I own the P&L, so I get it.
Did you know that your university payment systems can take away some of your pain? Meeting new demands from students and parents will actually save you money. How? We sponsored a revealing survey with Aite Group that explains the potential savings.
Are Open APIs the Stairway to the New Payments Ecosystem?
Losing yourself in music is something that everyone should do at least once a day. The freedoms that it affords one’s mind cannot be understated. In my eclectic (and eternal) playlist, there is one song that has likely been played at least twice as much as any other (and to be fair, it likely has the same global play counts); Stairway to Heaven by Led Zeppelin, an epic song that helped define the band to generations. But it was this past week when listening to the song when my mind was turning over thoughts on banking, and a line jumped out at me with new meaning; “There’s a feeling I get, when I look to the west…” While Jimmy and Robert were musing over much larger questions about life and death, my current journey had me subconsciously thinking about banking.
Where Do Banks Begin Once Instant Payments Are Available?
Listening to their customers and delivering new services will be crucial for the success of real-time banking and payments in Europe and the US
How mCommerce and eCommerce Are Shaping the Infomercial (Cash, check or money order?)
If you enjoy watching infomercials as much as we do, you’re likely familiar with the payment option that closes out these delightful paid programs...which brings us to another edition of Rantings, focused on Payment Habits. And after all, who hasn’t purchased a ShamWow!? Mark, we’re approaching the unofficial start of summer (editor’s note: there’s likely a future post on summer holiday purchases) and even though there’s no correlation between vacations and COD (cash on demand)—at least I don’t think there’s one—it at least provides an awkward segue into Payment Habits.