Voice of the Industry

Who survives in times of change? The most able to adapt

Tuesday 16 April 2019 06:45 CET | Voice of the industry

Regulatory initiatives create opportunity, but also complexity for travel companies. The way through? Cut through the complexity. Jeremy Dyball from Amadeus tells us how

About 541 million years ago, life on earth changed beyond all recognition. The Cambrian Explosion, as it is known to geologists, was a period of about 20 million years, during which more new species and types of animal life came into being than ever before or since. Before it, life on earth had been relatively simple and homogenous. After, the vast variety of life resembled that of today.

Analysts at the venture capital company Kleiner Perkins used this as an analogy for the current state of the Financial Technology industry. Those of us who work in the payments sector may feel it is a particularly apt metaphor. Currently, there are already more than 250 alternative payment methods and local cards in the world; and sometimes it feels like a new one is brought to market each week.

Our customers tell us they need payment solutions to cut through complexity. One single source of payment data. One single platform to manage the end-to-end payment process.

In Europe, PSD2 introduced a regulatory framework to open up the retail banking sector and encourage the entry of new payment services. Regulation changes are not just happening in Europe. India’s Unified Payments Interface (UPI) standardises every step of the payment process; the Monetary Authority of Singapore is encouraging new entrants with a combination of standardised programming interfaces and a specific regulatory regime to encourage innovation. The US is investigating on allowing non-banks to perform certain financial functions; and the Australian government is looking to replicate recent changes made in the UK which encourage financial innovation.

Such initiatives lower the barrier to entry for new players wishing to provide payment services, so we can expect to see the launch of even more disruptive payment services. Open banking initiatives foster an environment of collaboration. By opening up existing services – with the consumer in charge – there will be even less value in building ‘me-too’ services and a greater emphasis on innovation.

Complexity driving cost in travel

The initiatives create opportunity, but also complexity for travel companies. The travel industry is intrinsically global and multichannel. According to an internal research, over 30% of bookings made on airlines’ websites are coming from outside their home country, and 17% of bookings from outside their home continent. The complexity required to accept payments from around the world is huge. For example, one medium-sized airline has 24 different payment suppliers just to be able to accept payments from its customers in the countries it currently does business. This implies 24 technical implementations, 24 different daily performance reports and so on.

At Amadeus, we surveyed 78 heads of payment at travel companies around the world and found that managing all aspects of payment from multiple providers was the biggest pain point for the travel industry, cited by 41% of respondents. This complexity is driving huge cost for the travel industry: based on responses from our survey, we estimate the travel industry is spending USD 74.5 billion annually to manage payments, or 5.4% of revenue. This cost comprises direct fees paid to payment suppliers but also the indirect cost of manpower and capital expenditure required to manage a complex network of suppliers around the world.

Our customers tell us they need payment solutions to cut through complexity. They require a single place where they can connect and manage all their payment suppliers.

Cutting through the complexity

Our customers tell us they need payment solutions to cut through complexity, one single source of payment data, and one single platform to manage the end-to-end payment process. A single place where they can connect, access, and manage all their payment suppliers, with a dashboard that gives them visibility over performance and with the flexibility to define their payment strategy. One single connection.

This is what we are aiming to deliver with our Amadeus Xchange Payment Platform. Because, as Darwin once said, it is not the strongest, but the most able to adapt who will survive.

About Jeremy Dyball

Jeremy joined Amadeus in January 2018 to lead the sales effort for the company’s Xchange Payment Platform to travel merchants. Previous to Amadeus, Jeremy worked for 12 years at Elavon, where he worked with a range of travel companies on their payment strategy, most recently as VP in the acquirer’s global airline team from 2012-2018. Previous to Elavon, Jeremy worked in a range of roles in Lloyds TSB (a UK bank) and Thompson Reuters. 

About Amadeus

Amadeus puts travel companies in control of their payments strategy, helping them take payments from their customers, pay their suppliers, and optimise both. We apply global expertise and a network of trusted partnerships integrated into our smart payment Hub to provide travel companies and their customers with a seamless payments experience.

Want to read similar stories on the travel industry as well as on other verticals from the payments space? Check out our Payments and Commerce Market Guide for must-read insights from the top players of the payments ecosystem.


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Keywords: Amadeus, Jeremy Dyball, PSD2, payments, payment services, travel industry, Thought Leader Insights
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