Voice of the Industry

Four trends shaping cross-border travel payments

Monday 23 March 2020 13:34 CET | Editor: Raluca Constantinescu | Voice of the industry

Cross-Border Payments and Commerce Report 2019 - 2020 Jeremy Dyball, on behalf of Amadeus, shares with us four of the main trends that currently shape cross-border travel payments

Just a few years ago it was customary to pay for travel with cards, or perhaps even cash in some markets. We knew PSD2 was being introduced, but most of the people in the industry hadn’t heard about the new Strong Customer Authentication requirements, let alone devised a plan to implement them. In the B2B world some agencies had experimented with virtual cards, but the vast amount of volume was paid via legacy methods like lodge cards. And the concept of ‘frictionless payments’ in travel was nothing more than a dream, as customers battled against poor checkout flows, a lack of choice, and limited price transparency. My, how things are changing. 

Fast-forward to the present and we’re seeing a range of trends that re-define how people pay for travel. Here are my predictions for how four trends are going to play out in 2020. 

1. Delivering Strong Customer Authentication 

By now we’ve probably all heard about the importance of delivering the SCA requirements for electronic payments made within the EEA to be subject to two-factor authentication. But 2020 is when things get real for the travel industry, as the revised enforcement of 31 December 2020 draws near.  

For airlines, agencies, and hotels that sell large volumes indirectly and are part of multi-merchant packages, authenticating card holders with two-factors is far from straightforward. We’re going to see a rush to build in the industry’s new 3-D Secure protocol, which helps address this challenge, particularly for direct sales. When it comes to indirect sales, particularly in the corporate travel world, there’s going to need to be even closer collaboration between issuers, technology partners, travel providers, and TMCs if we’re to rise to this challenge. 

2. The explosion of payment methods will intensify 

According to our own Travel Payments Guide data analysis, 2019 marked the year that local, or alternative, methods of payment surpassed cards and cash combined for the first time. There are now over 300 ways for travellers to pay and I don’t see this exposition of innovation slowing any time soon. 

Polish mobile payment specialist BLIK was handling around 200,000 transactions just a couple of years ago and is now on course to hit 200 million in 2019 – and there are a host of similar examples from right across the world. In 2020, it’s my belief that many travel players will underestimate the pace of change and are likely to lose out on business simply because they don’t allow people to pay in the way they want. The US is a card-dominated market, but even there 45% of millennials don’t have a credit card, according to PPRO’s consumer market survey. 

3. Cards are going virtual, 2020 is the tipping point 

We’ve been talking about the fraud-reduction and reconciliation benefits of virtual cards for a number of years, but they still represent just a fraction of how agencies pay suppliers like airlines. This transition is definitely going to ramp-up in 2020 as trends like SCA and NDC-adoption naturally push people towards the data-rich capabilities of virtual payments. There are also moves to put virtual cards in the hands of business travellers via their mobile; whilst it’s not something we’re involved with, I can see growth there as well. Virtualising card payments is preferable for corporations, travellers, agencies, suppliers, technology companies, and the banks – 2020 looks like the tipping point. 

4. Frictionless payments will arrive 

I’m an optimist, so I’m going out on a limb to say I think at least a handful of travel brands will deliver a payments experience that can legitimately be described as ‘frictionless’ in 2020. For me, that means being able to pay how you want, with just a couple of clicks – preferably none, via your device of choice, with FX transparency and real-time fraud checks that don’t slow down the payment. And importantly, this is right across the travel experience, whether booking at home or buying lounge access at the airport. 

At Amadeus, our payments strategy is to integrate payments innovation for our customers, so they can access everything they need via a single link to make frictionless payments a reality. Based on the capabilities of our partners, I have confidence frictionless payments are coming in 2020. 

This editorial was first published in our Cross-Border Payments and Commerce Report 2019 – 2020, which provides a comprehensive overview of the major trends driving growth in cross-border payments, cross-border commerce, and marketplaces. 

About Jeremy Dyball 

Jeremy works closely with Amadeus’ customers to help them modernise their approach to travel payments, delivering efficiencies, new innovation, and an improved experience for the traveler. He was formerly VP of Global Accounts at Elavon and spent six years at British Airways. 

About Amadeus 

Amadeus serves every part of the global travel ecosystem, processing payments for travel agencies, airlines, airports, ground handlers, hotel chains, rail operators, car rental companies, tour operators, travel insurance providers, and cruise and ferry operators in 192 countries.

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Keywords: Amadeus, Jeremy Dyball, travel payments, PSD2, cross-border travel payments, SCA, payment methods
Categories: Payments & Commerce | Online Payments
Countries: World
This article is part of category

Payments & Commerce