Global Travel Rebound Calls for Fully Integrated, Fraud-Proof Payment Solutions

The international travel bounce-back continues, flying in the face of sky-high airfares and hotel costs, and making a strong case for travel merchants to up their performance when it comes to streamlining local requirements, managing foreign exchange (FX), and providing consumers with payment methods of choice, no matter what region they’re paying in, or where they’re going.

For their part, merchants operating in the sector are on the hunt for single integrations can that open multiple markets, manage compliance, and accommodate various payment types easily.

In an interview with PYMNTS, Ivan Guerrero, director of Airlines and Travel EMEA – Digital Commerce Division at Worldline, said that as international travel further recovers, merchants can capitalize on that momentum by offering efficient and localized cross-border payments.

This is “very important when we talk about an industry such as the airline and travel industry, which is global by essence,” he said, “but very local if you want to reach the consumers in their own language, in their own currency, in their own country,” as they browse and book travel.

Guerrero singled out preferred local payment methods as the top consideration, noting the historical and cultural aspects that make localization a powerful tool in conversion.

Another key element is optimizing currency conversion. “If I am in Thailand, if I’m a Thai consumer, I want to ensure that I can pay in my own currency,” he said. “That gives me comfort, that gives me security, and that makes it … easier for me to click on that buy button.”

Localization is more than offering the preferred card or payment scheme within different countries. Language has a huge impact, and it needs to show up on the checkout page.

“You have Portuguese in Portugal and Portuguese in Brazil. Same language, but different aspects to it,” he said. “If you’re able to consolidate and to customize, to personalize, all of those aspects, that’s the way that companies can capitalize as much as possible.”

Pay Your Way

FX fluctuations between countries and currencies can have a dramatic impact on the final price travelers pay, which makes platform management of this complex function critical to carriers and operators trying to fill airplane seats and hotel rooms.

Guerrero explained that Worldline has subject matter experts “including an entire foreign exchange team that helps our merchants to benefit out of that the most. When we … speak about the travel industry and the impact FX has on consumer behavior, that’s significant.”

Going back to his hypothetical Thai traveler to make the point, Guerrero said, “Being a Thai consumer, a Thai traveler, I want to ensure that whatever amount I agree on paying, that’s the amount that will be deducted and that I will see on my invoice, on my card.”

“Providing clear and upfront information about any exchange or surcharges builds trust.”

It’s equally crucial to merchants, as travel and hospitality work on notoriously thin margins. He said merchants that partner to optimize margins enjoy a competitive advantage, and their customers benefit downstream as improved margins can translate into discounts and deals.

Offering multicurrency payment options is another powerful way to convert travelers cross-border as people booking international travel want to see their national currency as a checkout choice, and not just the U.S. dollar or the euro. With roughly 180 currencies in the world in 2023, it’s easy to understand the conversion power of this level of payment localization.

Products to Handle BNPL, Fraud and Experience

Buy now, pay later (BNPL) or “fly now, pay later” as it’s often called in this sector, is an increasingly popular choice for the international traveler in an inflationary economy.

Guerrero used himself as an example this time.

Raised in Amsterdam and based in Spain, he said that for his family of five, “pre-COVID, we used to be able to buy tickets for maybe 50 to 80 euros. If we travel back to the Netherlands nowadays, it costs us 1,200 to 1,500 euros in midseason. I think that the increasing cost of hotels and airfares is leading to a greater adoption” of BNPL particularly.

“Buy now, pay later will definitely have a bigger share of wallet moving forward,” he said, but added that for many geographies “this is new from a regulatory and compliance point of view” and merchants need to be on top of it, as well as cross-border data privacy and security.

As BNPL use expands across borders, so must merchant understanding and compliance with lending and consumer protection on data privacy “and even anti-money laundering of the specific markets that they will be targeting,” he said, adding that in many markets BNPL is still “landing and expanding, as they say. Learning, replicating, and proceeding.”

A good rule of thumb is to “identify your top 10 markets and understand how the fraud culture of those 10 markets is. Have a close dialogue and open communication with your payment partner in this case to benchmark. Let them advise you on how they are mitigating risk factors or elements from a fraud point of view with other merchants which are equal to you, where you could learn from and start implementing and adopting similar strategies.”

Worldline has created two specialized products to manage this basket of cross-border complexities: Worldline Hospitality Suite and Worldline Travel & Airline Payments Suite.

“These are integrated solutions that are customized and tailored for the hospitality and travel industries,” he said. “Hospitality Suite … enables payments for hotel bookings, offers POS [point of sale] solutions and online payments, and integrations into property management systems. The Travel & Airline Payments Suite facilitates payments for airline ticketing and reservations.”

He said the two products are purpose-built to “enhance the payment experience, address the specific needs of the businesses, and try to find that alignment to get the airlines and hospitality merchants as close as possible [to] the end consumer.”