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Why airlines need a better payment customer experience

Intro: why Customer experience is key

A good customer experience is key to any airline retaining loyal, long-term consumers. Airline Chief Financial Officers know that it’s vital to make the shopping experience itself as easy, efficient, and enjoyable as possible, and have a solid customer experience strategy in place.

Any airline that wishes to grow must invest in its CX to ensure that their customers will enjoy shopping and return to buy more tickets again in future. According to a study conducted by Forrester, US airlines are potentially losing up to $1.4 billion in annual revenue by failing to optimise their CX.

The most important stage of the CX is arguably the transaction stage itself. Physical and digital retailers now have to strive to make sure that the payment experience is as easy and intuitive as possible, or risk turning potential customers away in favor of their better-prepared competitors.

The rise of digital payments worldwide has created a world in which the public now expects a frictionless payment CX for whatever product or service they choose to buy. This is especially relevant to airlines, where more and more customers are now looking to purchase their flights online rather than in-person. According to a study recently published on ResearchGate, a whopping 67.70% of airline booking activities are now conducted online. Meanwhile, per data provided by McKinsey, more than £16 billion is spent every year on payment costs in the airline industry.

Payments are a key part of the customer experience journey, and if things go awry here, it can impact how those customers perceive your brand. By addressing the fragmented payment experience, airlines can improve their customer experience while creating massive cost savings.

Airlines are also experiencing increasing competition from Online Travel Agencies (OTAs) who are web-based services that can allow consumers to research and book travel products and services, such as flights. Rather than simply pay for flights directly, customers can instead work through these intermediaries to arrange their travel, which takes the payment process out of their hands. According to research from PATA, OTAs have captured an average of 40% of the total global travel market, which includes air travel. Thus, organizations like Booking.com and Expedia are cutting into the potential revenue of airlines, making it more important than ever for them to get their payment CX correct.

But before we can improve the payment experience for customers, we first have to establish what aspects of the payment experience they find the most frustrating. To do that, we must first ask what barriers currently exist to prevent consumers from making a payment.

Cart abandonment in airline payments

The smoother the payment process is, the more likely customers are to return to the site and buy tickets again in the future. When the process of paying for a ticket is time-consuming, frustrating, or obtuse, it’s more likely that customers will become frustrated, give up, and leave the site in favour of a less-irritating competitor.

Cart abandonment is worryingly common across the airline industry as a whole; which boasts one of the highest rates of the phenomenon out of any industry sector. According to data provided by Zippia, a shocking 88.87% of airline ticket transactions are left abandoned before a payment can be made.

Because of this, airlines need to ensure they are accommodating as many payment categories as possible. Further, they must make every payment journey seamless to maximise sales and retain customers.

If an airline's payment CX is glitchy or unintuitive, the checkout process is too lengthy, then it is almost guaranteed to lose customers. Yet many modern airlines today are not giving their payment CX the investment it rightly deserves.

Instead, many travel businesses are content to rely on legacy systems that can’t accommodate the volume of payments and/or can’t connect new payment methods. When these systems are dysfunctional or don’t offer enough options for customers, this results in a greater number of failed transactions, which inevitably means more lost revenue.

Now, there are clearly challenges out there for CFOs who want their teams to optimise their airline’s payment CX, such as: adding numerous card types and alternative payment methods, handling relationships with a number of different acquirers, and paying fees associated with cross-border transactions and chargebacks.

The role of a positive payments CX

With these issues in mind, we can see why a Head of Payment or CFO might be reticent about investing more in their payment CX. But consider some of the net benefits that a positive payment CX can offer an airline.

If a customer wants to fly from New York to Los Angeles, their trip doesn’t begin when they step on board the plane, from the minute they enter the airport or the second they leave their own home. The customer’s journey with your airline begins the second they interact with your brand. The time that customers spend booking and paying for the ticket is all part of their travel experience with your airline.

This is why airlines need to ensure that their customers have a positive experience from the moment they book their flight to the moment they arrive at their destination. Therefore, ensuring that their payment experience is optimised can ensure that their overall journey is a positive one.

A seamless payment CX also means an airline can be proactive about potential lost revenue, allowing it to retain its current customers and capture new consumers in fresh markets.

There’s also the fact that digital customers expect online stores to cater to a wide variety of payment options. In the globalised digital travel marketplace, brands need to be able to ensure that all currencies can be accepted from any part of the world.

Optimising the payment CX means including more payment options, such as new currencies or payments from digital wallets, to expand the airline’s reach. On the other hand, by neglecting to offer consumers their preferred payment options, airlines risk alienating a significant number of potential customers.

According to a study of more than 50.9 million online shoppers conducted by Merchant Advice Service, 67% of respondents claimed they found it frustrating when there is a lack of payment methods available, and a further 54% of them stated they were discouraged to complete an online purchase if the payment options consisted only of debit or credit cards. By adopting a better payment CX, an airline can in turn, increase its potential takings and make its ticket pricing more competitive.

67%

found it frustrating when there is a lack of payment methods available

54%

were discouraged to complete an online purchase consisting only of debit or credit cards

10-15%

increased airline revenue by improved CX

A positive payment CX can also help strengthen loyalty among an airline’s existing consumers. According to data from Forrester, customers are 2.4 times more likely to stick with a brand when their problems are solved quickly: meaning that they are more likely to remain loyal over time. When

A good CX can also provide free word-of-mouth advertising for the airline that invests in it well. Research from Zappia suggests that the average customer is typically inspired to tell at least six other people about a positive CX when visiting a physical or online store. This means that by investing in your airline’s CX, you’ll also be proactively marketing your brand at the same time.

Lastly, when payments are optimised for CX, there’s a greater chance that conversions can be successful. Again, data courtesy of Zippia shows that an improved CX can increase airline revenue by 10-15%, meaning that investing in a better CX practically pays for itself, thanks to the ROI.[1]

The key to success in the airline industry is aligning the payment expectations of customers with the actual payment processes by offering a seamless payment CX. This will allow the airline in question to be proactive about potential lost revenue while also creating more value for its customers.

The challenges for an airline CFO looking to improve their customer CX might seem too diffuse to properly address. But Payment Orchestration provides an easy way for airlines to solve all their myriad CX issues in one fell swoop.

How Payment Orchestration can benefit airline merchants

Payment Orchestration is a game-changer for multinational and omnichannel companies (i.e. airlines) because they help increase their security and save on operational costs while enhancing the customer experience into the bargain. Here are just some of the specific benefits that Payment Orchestration can provide airline merchants:

Increase customer satisfaction
- Firstly, Payment Orchestration makes it possible for airlines to deliver the best possible payments CX by providing customers with the right payment to match their needs and preferences. When customers can make their payments quickly and easily with their preferred payment method, customer satisfaction goes up. This increases the likelihood of them returning to your airline for their travel plans in the future, as they will remember how simple and easy it was to make a booking.
Streamline operations
- By improving your payment CX, your airline can also streamline operations for your staff. Airline merchants are often bogged down by the technical difficulties of payment management, which occurs in part because of how siloed legacy systems can be. Payment Orchestration consolidates all payment channels into one holistic system. Freed of the burden of managing so many disparate tools, airline merchants have more free time to focus on making their business a success.
Increased flexibility
- Another boon is that Payment Orchestration allows merchants to add unbundled service providers or new PSPs while simultaneously aggregating technical connections and their data. This means they will always be able to stay up-to-date with newly-emerging payment methods so that consumers' payment needs can be anticipated and addressed well in advance.
Reduce the risk of fraud
- Finally, implementing Payment Orchestration can help an airline prioritise the security of its transactions. It does this by removing redundant steps in the payment process, which often make it easier for cybercriminals to hack payments, which in turn, can streamline the payment CX by removing some of the more time-consuming minutiae. These measures help keep your business secure while also reassuring your customers that their information is safe. This especially applies to mobile checkouts, which need to be doubly optimised for security.

Transform your airline payment customer experience with Payment Orchestration

CellPoint already has all the expertise to help you succeed and boasts a proven track record of implementing Payment Orchestration for a number of airlines, including Icelandair, Virgin Atlantic, Arajet, and many more. This means that they understand the unique challenges that airlines face when it comes to ticketing, reconciliation, and refunds.

CellPoint’s own Payment Orchestration Platform, Velocity, enables airlines to capture more conversions and access more revenue while providing consumers with an improved payment experience all round.

Payment Orchestration is the future of payments, and airline merchants can’t afford to be complacent. Failing to adopt innovative payment technology runs the risk of an airline becoming perceived as obsolescent by consumers, resulting in lost business and a dampened reputation.

So, if you’re interested and looking to get started, contact CellPoint Digital today to learn more about our Payment Orchestration solutions now.

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