Payments Innovation

Digital Lending’s $1.4T Travel Payments Plan

The family trip to Disney World, the honeymoon to Hawaii, the 25-year anniversary spent in Paris — the big trips people take aren’t just vacations or chances to see something new, but often mark the biggest events in people’s lives.

However, seeing the world and making memories in unforgettable places are not inexpensive. Once-in-a-lifetime trips often carry once-in-a-lifetime bills. An “affordable” trip to Disney for a family of four costs about $2,500.

Unlike most of the other big-ticket purchases in a consumer’s life, where cutting-edge options for financing abound, innovations in the travel market have been far fewer.

The problem, according to Uplift President Rob Soderbery, is that travel is a complex business, particularly when it comes to payments, which have turned many innovators away. The result, he said, is that the $1.4 trillion leisure travel market is ripe for the same kind of digital lending options that have emerged in other parts of the retail ecosystem.

Uplift, a B2B payments platform, was created to fill that innovation gap. The platform allows travel operators to offer digital lending options as a seamless part of making the travel reservation.

“The market is real, big and immediate. Travel is complex, and customers want to be able to research, book and pay all within the same experience. We enable travel brands to offer a really simple, flexible payment solution, all within their own branding, without sending their customer[s] off to an underwriting site,” Soderbery explained.

The Upfront Buying Experience

Uplift offers installment loans for travelers between $300 and $15,000 (the average loan is between $500 and $2,500), which can be paid in three-, six- or 12-month terms. Borrowers on the platform, according to Soderbery, have credit profiles ranging from super prime to subprime — a range he credits to the depth of information Uplift is able to gather on its customers beyond “routine credit info.”

Travel shoppers, he noted, are a bit different from the average retail customers on the prowl. They tend to research more, spend longer and favor more consolidated experiences.

Uplift joins in and starts collecting data on the journey earlier than most players, because when a consumer logs in with an Uplift partner, the option of financing is a presented from the landing page on. This means the customer can sign in earlier, and Uplift can get a jump on evaluating if and for how much they can be underwritten, then offer that up to the shopper. That, he noted, totally changes how the shopper approaches the entire experience.

“We see conversion rates go up threefold by putting the financing information right up front, because it has a huge impact in the depth to which consumers go down the funnel,” Soderbery said.

That higher conversion rate, he noted, expands past customers who make use of the financing. Uplift also sees a higher conversion rate of consumers who use the financing tool as a calculator throughout the planning process, and they are still more likely to book the trip even when they end up deciding to pay in full at the end.

More than a boosted conversion rate, Soderbery went on to add that the travel merchants also get the benefit of being paid when the transactions are complete. Uplift supplies them the funds in full for the travel booked, and takes on the management and administration of the loans from there.

Customers are able to book the trips they want to purchase (often upgraded or improved versions of those trips), and merchants are able to lock down customers and their boosted spend without additional labor, Soderbery said, because Uplift’s user experience teams run and manage integrations.

Managing The Road Ahead

There is a perception that travel is a high-risk market, laden with chargebacks. Soderbery said that’s not necessarily true. Travel is an undeniably complicated sector in which to do payments, but Uplift rarely sees consumers coming back from a trip unhappy and looking to get their money back.

Quite the opposite, he said. Most come back from trips happy to have spent the money, reporting greater satisfaction with Uplift’s services than they did before leaving, and — on the whole  expressing gratitude to have been able to finance the exact vacations they wanted.

“I mean, we have literally received handwritten thank-you notes,” he explained.

For a certain set of customers, these trips and the ability to finance them in a transparent way is an important spend Uplift is going to work hard to protect — and the company mostly sees people happy to pay off their loans. Doing that better, he said (and at a larger scale than today), is the firm’s goal for 2019.

As of the end of last year, Uplift had served 100,000 travelers. As of the end of 2019, the goal is to have served 1 million travelers — and to have lent out a full $1 billion. It’s not a small ambition, but Uplift recently snapped a big boost in the form of $123 million in Series C funding, announced last week.

Beyond growing in size, Soderbery told Webster, Uplift aims to build on its financing product to offer more innovations in payments for leisure travelers. In Q4, he noted, the company was able to expand its offerings to call centers and travel agents, making it possible for them to offer Uplift financing to consumers offline during phone bookings, without have to take in any personal or financial data from consumers.

The goal for Uplift by the end of 2019, as it is working to build out and beyond, is to bring as many travel partners onto its financing platform as possible, then figure out how to offer as much of that platform as possible to those partners.

“I am looking to build the franchise of my partners. I am not trying to build my own consumer platform. We are here to support our partners, to build our partners’ brands, and to deliver new products and capabilities to them,” he said.

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