As payment trends in travel continue to evolve, we thought it might be interesting to explore some of the emerging payment technologies that are being rolled out in the industry. Over the next few years, we’re likely to see some pretty significant changes to how people pay for airfares, accommodation, and related travel services.
If you’ve been in the travel industry for a while, you’re probably getting tired of hearing people complain about how long it takes to get paid by credit card processors — especially as the industry moves towards higher transaction values.
Here are a few payment trends you should know about:
1. Wider adoption of digital wallets and BNPL methods
During the pandemic, contactless payments were widely preferred by customers. Contactless payments continued to dominate the scene after lockdown restrictions eased, with 65% of payments made this way in the UK, according to the BBC.
Alternative digital payments options like digital wallets and Buy Now Pay Later (BNPL) have also gained more traction during this time, mainly due to the low barriers for entry and ease of accessibility. In many cases, consumers don’t require a bank account to be able to use these payment methods, just a prepaid card.
We predict that in 2022, virtual payment cards and mobile wallets will gain further traction in the business travel sector. Airlines will be able to accept a range of emerging mobile wallet payments by the end of the year – so Apple and Google Pay, and even PayPal will make their way into the travel norms.
2. The rise of the subscription model
In recent years, it has become more and more popular to make monthly or annual payments instead of one-time purchases. In 2022, subscriptions will be added by some companies to their mix of revenue streams, while others will consider making subscriptions their main offerings. To bring stability to their business, some travel companies will offer perks on top of their subscription service. This new direction will also play into another emerging consumer trend: sustainability. This way, business models that rely on service contracts based on planned obsolescence will gradually be replaced by subscription-based models.
3. Blockchain in travel: Will it revolutionise the industry?
In 2021 customers started booking travel with cryptocurrency, and in 2022 it’s predicted that blockchain will continue to streamline processes, eliminate common challenges, and promote a more equitable ecosystem by eliminating gatekeepers. Airfare website Cheapair.com, Latvian carrier Air Baltic and Richard Branson’s Virgin Galactic were the first ones to get on board with Bitcoin, and we are predicting that even more companies will integrate cryptocurrency in their payments for 2022. The blockchain will soon allow payments to be carried out similarly to existing POS and credit card transactions. Other uses of crypto in travel that will most likely expand this year are tracking booking reservations from hotels and agents and offering lower airfares alternatives to booking sites like Expedia. This competitiveness is possible due to the lack of currency exchange fees, loyalty programs, and intelligently managing travel data like personal marketing preferences that customers can trade for perks.
4. Focus on mobile payments
Delivering a seamless mobile payment experience should be the focus for businesses in the travel industry in 2022. According to Worldpay, 43% of passengers book a flight starting with social media offers, so it’s crucial to ensure the transition between social channels and your mobile website is seamless. There is an openness to one-click payments where customers can pay directly on social channels in a single click – so working with a payments partner that can help your business enable social selling links is key.
5. Guest checkout is preferred
With a short attention span, customers don’t have the patience to fill in their details to register for an account anymore. There is an increased preference for a guest checkout option, especially for customers who don’t frequently travel, so businesses should capitalise on this trend and make the guest payment process as frictionless as possible.
We’re still in the early stages of travel technology and payment trends, but there are some amazing innovations being rolled out right now that will change the way we pay for airfare and related services in the future. It’s an exciting time to either drive or be a passenger on this journey.