The traditional payment systems in the airline industry, once adequate, now face significant challenges in meeting modern e-commerce expectations.
The limitations include cumbersome reconciliation processes, rigid infrastructures, and a lack of customisation, all of which hamper the ability to provide frictionless payment experiences. Specific challenges include:
1. The burden of data reconciliation
Traditional bundled payment solutions often require manual efforts to reconcile transactions, match payment data, and ensure accuracy.
This time-consuming and error-prone process can lead to inefficiencies and increased operational costs for airlines.
The lack of automated reconciliation capabilities increases the risk of human error, potentially resulting in discrepancies in financial records and difficulties in tracking and resolving payment-related issues.
2. Management of technical connections
Bundled payment solutions typically have a fixed set of technical integrations with payment service providers (PSPs), limiting the flexibility for airlines to adapt to new payment methods or onboard additional PSPs.
As new payment options emerge, airlines may face difficulties in integrating them into their existing bundled solution, resulting in missed business opportunities and/or the inability to cater to evolving customer preferences.
This rigid infrastructure can hinder the airlines ability to embrace emerging technologies and keep pace with the rapidly changing payment landscape.
3. Lack of componentisation
These solutions also lack the componentisation necessary for future scalability and customisability. Airlines may find it challenging to integrate individual payment functionalities or services according to their specific needs.
This inflexibility restricts their ability to tailor payment experiences and limits innovation in payment offerings.
As customer expectations evolve, airlines need the freedom to choose and combine various payment components, such as fraud detection systems, subscription management, or loyalty program integrations, to create a unique and personalised payment ecosystem.
4. Inadequate support for global expansion
As airlines expand their business globally, they encounter diverse regional payment preferences and regulatory requirements.
However, traditional bundled payment solutions may lack the necessary support for international payment methods, local currencies, or compliance with specific regional regulations.
This limitation restricts the airlines ability to provide a seamless payment experience to customers worldwide and may result in lost sales opportunities in different markets.
5. Security and compliance challenges
Traditional bundled payment solutions may not always offer the level of security and compliance required in the modern payment landscape.
With increasing instances of data breaches and evolving regulatory standards, airlines need robust security measures and compliance functionalities to protect sensitive customer information and adhere to industry regulations.
Without these capabilities, airlines may face reputational damage, financial losses, or legal repercussions.