The airline payment guide for 2022

The payment process is an integral part of the travel booking experience. Nearly 30% of travellers stop the checkout process and move to another airline if their preferred payment method isn't available. Many times flights are a high-value transaction for travellers, so they give these purchases more consideration as they move through the payment process. This makes it critical for airlines to ensure minimal friction through the process by offering the right payment types across different markets.

For example, today's digital travellers may be open to booking and paying for flights in various ways:

• 51% of Indian travellers would book and pay for a flight through a mobile app such as an airline-branded or travel app.
• 43% of global travellers said they booked a flight after clicking through from social media.
• 19% of Brazilians would be willing to pay for flights in installments.
• 71% of U.K. travellers said they prefer to book flights via their computers.
• 30% of German travellers prefer using mobile wallets such as PayPal to pay for flights and travel.

Consumers expect each of these payment experiences to be seamless, regardless of their preference. The transition between starting the booking process (such as an app or website) and paying for it must be optimised to make it easy, efficient, and secure.

Airlines’ must have the appropriate technology, web / native apps, and mobile services that can offer all this and more while still being efficient and optimised.

Let's take a closer look at some of the ways airlines can optimise their payment processes to provide insight, increase topline revenue, and reduce costs, all while improving the customer experience.

Flights are often the most expensive part of anyone's travel experience. That's why many airlines are starting to offer instalment payment options through services like Affirm, Klarna, Afterpay, and Uplift. Also known as point-of-sale loans, these services allow travellers the option to pay for the flight or trip over a fixed period.

Offering the instalment payment option globally could open an airline to new customers in new and existing markets. Travellers in Latin American markets expect this option more than the rest of the world as paying by instalment is a popular method of payment elsewhere in their economies. It has since spread across the digital world there and become a very popular way to pay for online purchases across many industries. Other regions would be open to instalment payments for flights, too, with India, Spain, and the U.S. also showing that close to or more than half of travellers would pay for flights by instalments.

These third-party vendors make it easy to integrate this option into an airline's payment process, with many offering API webhooks or no-code ways of interfacing with your internal systems. But, since external vendors provide these services, airlines must do their due diligence and only partner with reputable loan operators.

Friction in a payment process for customers could refer to many things, such as a declined payment without an explanation, an unexpected site redirect, or the need to re-enter their payment or contact information several times. Most travellers will react negatively to any payment friction, causing them to go with a competitor or skip the booking altogether.

Suppose you can reduce the friction by eliminating the obstacles that can happen during online payment. In that case, you stand a better chance of earning the immediate sale and keeping them as a loyal customer, for example, by automatically verifying correct payment details and providing meaningful error messages as needed.

Make it easy to enter payment details
Making it easy to purchase flights online starts by only asking for payment information once during the checkout process. If a web or mobile app requires travellers to enter the details more than once, they're more likely to exit the purchase process. In one survey, over 40% of travellers wouldn't continue a travel booking if they had to re-enter personal information more than once.

Many eCommerce sites offer the ability to check out as a guest without having to register for an account on the website. While many travellers would prefer to create an account on your airline website to save their data securely, others don't. This could be due to their cultural or personal preferences, so airlines that offer both options will please more travellers.

Further, some travellers save their payment details in their web browser or password manager extension. Giving the airline's website payment processing functionality access to this data would encourage these travellers to book more often. This is a big feature for American travellers, with nearly 70% of them saying they're more likely to purchase a flight if they can use the payment details saved in their browsers.

• Reduce declined transaction rates with automatic payment detail updates
  It is important to offer travellers the ability to store cards securely, And some acquirers can automatically update expired or replaced credit card information for payment details airlines have on file for registered travellers. Card schemes such as American Express and Mastercard offer this service, but not all travellers like it. Some surveys show a strong preference for it in China, India, and Mexico, but not in other areas of Europe and the Americas.
  
  
• Add local and preferred currency payment options to booking portals
  Another element that can encourage travellers to book flights is paying in their local currency or a preferred currency. Given the difference in pricing for different currencies, it can significantly impact a traveller's buying decision. They can avoid high or unexpected exchange fees and take advantage of good exchange rates.
  
  For example, a European traveller may appreciate paying for a flight on a non-European carrier in Euros to take advantage of the positive exchange rate for them and avoid potential bank charges. To do this, airlines would have to implement dynamic currency conversion (DCC) software in their payment processing system and then integrate it into their end-user interface to highlight the cost in the traveller's chosen currency.
  
  
• Offer extras up-front
  Another way to reduce the payment friction for travellers is to sell additional services at the time of purchase. For example, selling a meal voucher when the ticket is purchased, so travellers don't have to worry about buying their meal on the plane. Or offering upgrades and add-ons to their flight that could be purchased easily at the gate or airport with a tap of their bank card. Travellers would only have to go through the payment process once, reducing the friction while increasing your revenues.
  
  This idea only works, however, by considering the offline traveller touchpoints throughout their trip. Give them a chance to combine purchases where appropriate to make it simpler and efficient for travellers to upgrade and enhance their travel experience. Each touchpoint must have the appropriate payment solution available, whether it's a contactless point-of-sale device at the airport gate or an additional product list and purchase feature in your eCommerce web app. The challenge with offer and order management is the fulfilment throughout the customer journey.

Source: WorldPay from FIS

There's nothing like getting to the end of an online checkout process and seeing extra fees or hidden charges that you weren't prepared for. Travellers are no different and don't want to be surprised at any part of the payment process.

Airline websites, native and mobile apps should be clear about any costs and fees that may arise based on travellers' options. It builds trust and improves the overall payment experience.

Likewise, when something goes wrong during the payment process, clear communication about what's happened through useful error messages and annotations. Clear error messages are critical during the payment process as travellers may already be nervous about entering their payment details online. Consider the difference between "Please validate your payment details" and "We're sorry. There was a technical error on our end. Can you please re-check your payment details so we can try again?" Most online shoppers need a detailed payment error message to feel secure enough to retry the payment, so make sure your payment solution can provide them. Or lets you create custom messages as appropriate.

Inline verification of banking information during the payment process can increase cart abandonment rates due to payment declines caused by data entry errors. For example, if paying by credit card and the traveller enters a card number that's too short or an expiry date in the past, a noticeable highlight and meaningful error message make it obvious and easy for travellers to fix. Often times resulting in a soft decline that can be remedied by the ability to retry with the correct data.

For a positive spin on the communication tactic, airlines can be more transparent about their payment process by using interface elements to showcase progress. Paying for a flight often involves several steps, so showing where they are in the process with a progress bar improves the customer experience, increases conversions, and builds loyalty.