Payments Orchestration Plays Major Role in Meeting Travel Business Complexity

Airlines run on two things: schedules and exceptions to those schedules.

For the travel industry, building the plane itself represents a more straightforward, even simpler, exercise than getting it into the air and landing it smoothly.

To ensure reliable travel — aligning schedules across global time zones, managing real-time disruptions, coordinating with airports, handling passenger service — the travel industry faces the unpredictable.

Weather disruptions, delays, maintenance issues, shifting fuel costs, unexpected crew shortages, and changing government regulations are all compounded by the logistical challenges of passenger management across languages, cultures and customs.

Against this backdrop, the legacy systems many airlines still rely on are proving inadequate in an industry where complexity and consumer expectations are rising, CellPoint Digital CEO Kristian Gjerding told PYMNTS. At the center of streamlining operations lies the role of payment orchestration as a strategic asset for airlines.

According to Gjerding, airlines and their payment systems, in particular, are at a crossroads, faced with the dual pressures of growing passenger volumes and complex operations.

“Historically, airlines have sought profitability by increasing conversion rates and reducing costs,” he said.

However, as consumer expectations shift and the payments become more varied, airlines are beginning to see payments as a revenue driver. This has led early adopters in the industry to consider moving from external service providers to internal, platform-based payment orchestration systems.

Better Payments for the Travel Industry

Payment orchestration allows airlines to use payments as an asset, delivering returns on the flow of money handled daily, Gjerding said. By integrating payments, airlines are seeing opportunities to increase ROI and efficiency.

Payment orchestration platforms like CellPoint can improve airlines in three areas: financial returns, operational efficiency and customer experience.

Financially, orchestration platforms boost conversion rates and reduce costs; operationally, they simplify payments — a critical need for airlines that process millions of transactions daily across B2C and B2B channels.

With features tailored to airlines, CellPoint’s platform allows companies to streamline back-office operations and reduce time to market for new solutions, Gjerding said.

Payment orchestration allows passengers to easily navigate digital channels, regardless of the device or service they use, he said. A smoother, more accessible payment process enables airlines to enhance customer engagement directly, reducing reliance on more third-party channels.

Gjerding said he believes integrating multiple payment options through an orchestration platform can be a game changer for airlines. For example, buy now, pay later options might be viable in some markets but risky in others due to fraud concerns. The orchestration platform automates and simplifies this decision-making process.

Using data from billions of dollars in transactions across various markets, CellPoint offers clients a model that predicts conversion ratios based on different payment scenarios, helping airlines refine their payment offerings.

The Offer-Order Model

An evolution in airline commerce is the “offer-order” model, which reimagines how travelers buy services. Traditionally, airline bookings followed a linear process. With the offer-order approach, airlines can now emulate an eCommerce shopping experience, allowing travelers to build a travel package in a single transaction. This model lets passengers select flights, accommodations and ancillary services in a flexible shopping basket, much like an Amazon cart.

While the offer-order model offers upsell opportunities, it also adds complexity to the payment process, especially regarding partial refunds and reconciliation. Orchestration platforms are crucial for supporting these advanced workflows and integrating with core airline systems, allowing them to handle complex transactions and offer seamless experiences across various touchpoints, from mobile apps to airport kiosks, Gjerding said.

When it comes to implementing payment orchestration, Gjerding recommended a step-by-step approach. He advised airlines to initially focus on improving conversion rates and reducing costs in their existing payments before advancing to more complex, revenue-generating use cases.

For airlines beginning their journey with payment orchestration, he stressed the importance of defining clear objectives early on.

“Map out your value creation,” he said, as this initial assessment will guide subsequent technical and operational choices.