Expert Tips on Maximizing Payment Performance in the Travel Industry

The travel industry is a dynamic and rapidly evolving sector, with millions of people worldwide relying on it to connect with others, explore new destinations, and conduct business. Yet, with the rise of digital payment methods, increased competition, and changing consumer behavior, travel companies are under constant pressure to optimize their performance and stay ahead of the curve.

In this article, we will provide you with practical advice on maximizing payment performance in the travel industry, from reducing processing costs to enhancing customer experiences. Whether you're running a hotel, a transportation company, or a tour business, these tips will allow you to stay competitive in today's fast-paced and ever-changing travel landscape. Let's dive in!

How Have Payments in the Travel Sphere Changed Recently?

The COVID-19 pandemic has further accelerated this trend and streamlined the adoption of contactless and cashless payment methods, with many consumers avoiding physical contact with banknotes and cards. As a result, travel firms had to adapt by offering more digital payment options and handling a large influx of customer requests.

Furthermore, the pandemic has caused significant disruptions, causing many flights and reservations to be canceled or postponed. This has resulted in a surge in refunds and chargebacks, which has put pressure on travel companies to implement more robust payment systems and fraud prevention measures.

These factors have shaped the payments landscape that we see in the travel industry today. But which forces are driving its further developments?

Key Payment Trends to Follow in the Travel Industry Nowadays

The travel industry has always been at the forefront of innovation and technology adoption when it comes to payments. Today, we're seeing several payment trends that are reshaping the travel sector and transforming the way people book and pay for their trips, namely:

• The continuing rise of mobile payments. More and more travelers nowadays use their smartphones to make bookings and payments on the go, driven by their convenience and speed.
• The growing popularity of digital wallets. With the growing concerns around data security and privacy, e-wallets like Apple Pay, Google Pay, and PayPal are reliable and safe options for travelers to store their payment information. What’s more, they offer a quick and easy way for travelers to make payments and store tickets, making them a preferred choice for many.
• An increasing demand for Buy Now, Pay Later services. Although Europe saw a 172% rise in international tourist arrivals between January-July 2021 and 2022, travel has become more expensive, squeezing consumer budgets. This has led to the growing popularity of BNPL solutions, with 28% of customers in the tourism sector expressing interest in split payments.
• A shift toward real-time payments. With RTPs, travelers can quickly and securely pay for their travel-related expenses, such as tickets, accommodation, and activities, without having to deal with any processing delays.
• The need to offer multi-currency payments. As the number of travelers keeps growing, the need for seamless and cost-effective multi-currency transactions has become critical. By providing clients with the ability to pay in their local currency, you can help them avoid unnecessary charges and eliminate the confusion associated with foreign exchange rates.

Businesses that adapt to these payment trends will be better positioned to succeed in the increasingly competitive travel industry. However, in addition to the aspects listed above, it is also crucial to keep payment orchestration in mind - read on to learn more about it.

The Importance of Payment Orchestration in the Travel Sector

Payment orchestration is the process of managing and optimizing multiple payment providers in a unified and streamlined way. Although it is a relatively new concept in the travel industry context, it's rapidly gaining popularity due to the variety of benefits it offers, such as:

• Increased conversion rates. By using payment orchestration, companies in the travel industry can offer a wider range of payment methods to their customers, including local and regional options that may not be available through a single PSP. This can drive conversions, as clients are more likely to complete a purchase if they can use their preferred methods.
• Reduced payment processing costs. Payment orchestration can also help travel businesses to reduce their transaction processing costs by streamlining their operations and optimizing payment routing.
• Improved security and fraud prevention. Payment orchestration can provide travel businesses with advanced risk management capabilities, better compliance with regulatory requirements, strong customer authentication methods, and enhanced fraud intelligence.
• Streamlined payment operations. Implementing payment orchestration enables companies in the travel sector to optimize their operations. By managing multiple payment providers via a single platform, firms can reduce the amount of time and resources required to manage transactions, freeing up staff to focus on other tasks.

Payment Optimization for Long-Term Travel Business Success

Developing winning tactics is not always easy and straightforward when running a travel business due to the peculiarities of the industry, yet following current trends and adopting innovative approaches is typically very effective for ensuring a company’s success.

What’s more, for a travel firm to have a strong foundation and solid resilience to the changing market conditions, business owners should also focus on implementing some of the best payment optimization practices that have proven to be effective over time, including:

• Simplifying the checkout process. The travel industry moves at a fast pace, and customers want to book and pay for their trips quickly and easily. Thus, it’s essential to ensure that the checkout process is user-friendly, mobile-optimized, and clearly displays the accepted payment methods.
• Leveraging data to improve payments. Data analytics can assist travel companies in identifying trends in consumer behavior, such as the most popular payment methods or peak booking times. This information can help optimize a company’s operations and increase conversions.
• Offering a variety of relevant payment options. Travel businesses cater to a diverse range of customers, each with their own preferences for payment methods. By offering a variety of options, such as digital wallets, credit cards, and installment payments, they can increase the chances of customers completing their purchases.
• Complying with regulations. The travel industry is subject to a plethora of regulations that vary from one country to another. It's important to stay up-to-date with these requirements to avoid legal issues and penalties.
• Collaborating with a reliable payment gateway. Travel companies process a large volume of payment transactions, which makes them a prime target for fraudsters and cybercriminals. Thus, a scalable and secure payment gateway is critical for data protection and business expansion.

With these tips in mind, you can build a timeless strategy for your travel-related business, enhance payment performance, meet customer expectations, and stay competitive in the industry for years to come.