Consumers want a single point of contact to manage their travel experiences; travel operators want a single point of contact to manage all of the payments options their would-be travelers want to use. In the Accelerating Time To New Markets Playbook, Michael Gradek, co-founder of travel site Busbud, explains how API-enabled payments orchestration makes it easy to expand into new markets with consumer payments choice.
Providing global customers localized payment experiences that match their expectations is fundamental to the travel industry, but it also can be difficult to deliver on these expectations when businesses enter new markets. The process of adopting new payment methods, fighting fraud and shopping for new service providers tends to become more complex as payments stacks grow more intricate.
These are only a few of the key challenges that travel businesses face as they expand, according to Michael Gradek, co-founder and chief technology officer at travel site Busbud, which enables consumers to search, compare prices of and book intercity bus and train tickets for both domestic and international travel across 85 countries.
Gradek spoke to PYMNTS about how Busbud’s payments strategy has evolved over the course of the company’s international expansion, offering a firsthand account of the benefits and scalability that payments orchestration has yielded. When founded, Busbud was focused chiefly on making its payments offerings both easy to use and secure, but delivering that easy-to-use, secure payments experience grew more complicated as the company entered new markets.
“As we covered more and more countries, we needed to partner with more payment processors to handle local payments more effectively,” Gradek said.
Busbud began searching for new ways to streamline its back-end processes, not only to enhance the end user’s experience, but also to make the company’s own payments operations more efficient.
Mounting Cross-Border Frictions
One of the key challenges Busbud faced was fraud. Mitigating fraud risks in the transportation sector can be particularly challenging, especially in the cross-border context. This is partly because it is more difficult for travel companies to authenticate transactions than it might be for eCommerce merchants. It is not enough to simply check whether a billing address matches up with a user’s IP address, for example.
“In travel, that alignment of who gets the ticket, where they are at the time of purchase and at the time of travel, as well as where the billing address would locate them [often is not perfect],” Gradek said.
Consumers frequently buy their tickets from locations other than those suggested by their billing addresses, with many making their purchases from entirely different countries. Also, many consumers buy tickets for friends and family, making it even harder to verify whether the individual purchasing is a legitimate customer or a fraudster.
“This difficulty is compounded by the fact that customers expect to receive their tickets immediately after completing the transaction, so there is very little time left for a thorough manual review,” Gradek explained.
In practice, this means Busbud has had to connect with several anti-fraud service providers to find the solution that worked best for the company.
“We’re happy with our current [provider], but the switchover happened just before the pandemic, so time will tell if we’ve found a partner that meets our high bar here,” he said.
Gradek noted that Busbud’s door is always open to new providers and new integrations for continuous improvement.
Orchestrating the Answer: A Flexible Future
Payments orchestration, provided by Spreedly, has helped Busbud simplify and streamline the process of integrating with new payment service providers (PSPs), considerably reducing time to market and also providing the company the operational flexibility it needs to quickly adapt to new markets and changes as they occur. This type of integration once took far longer, but using an application programming interface (API)-enabled payments orchestration layer made integration one of the shorter steps Busbud needed to take to add new capabilities to its payments stacks.
“It’s a couple of minutes of configuration on our side, and [we spend] usually a lot more time on the paperwork and contracting with the payment processor,” Gradek said.
The speed and ease with which Busbud now is able to integrate new payments capabilities also opens the door to new testing capabilities. Since Busbud does not need to commit a great deal of time and effort to a custom integration, the company can give new integrations test runs to gauge their effectiveness and return on investment (ROI) with minimal risk.
“We get to test them out very quickly and can then use real production data to inform the decision around a deeper, more fully featured integration, if necessary,” he said.
The benefits of this infrastructure flexibility go well beyond testing. It also gives Busbud a better hand in its relationships with its PSPs by allowing the company to shop around and compare the benefits of several new payments capabilities simultaneously. This keeps Busbud from having to fully commit to any new relationship without a clear understanding of its benefits.
“That puts us in a better negotiating position with existing processors as well,” Gradek said.
In practice, this process often means Busbud has more freedom to negotiate terms with new and prospective business partners.
Busbud’s success with payments orchestration illustrates the transformative power the technology can have to not only improve top-line performance in the present but also position companies for future success in the international arena.
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