Travala on the Onboarding Challenges of Cryptocurrency Payments

Cryptocurrency has been used as a high-volatility investment ever since the debut of Bitcoin in 2009,but only in the past few years has it gained widespread acceptance as a mainstream payment method. Companies as diverse as Starbucks, KFC and Overstock.com have introduced cryptocurrency payment options in recent years. Its proponents herald this introduction as a new frontier in secure contactless payments.

The implementation of crypto acceptance is often easier said than done, however. Even companies such as Travala, an online travel booking platform that conducts most transactions in cryptocurrency, faces everyday challenges when processing cryptocurrency payments, including risk management and customer onboarding.

“Back in 2018, Expedia tried to use bitcoin payments, and that didn’t go very well for them,” Juan Otero, co-founder and CEO at Travala, said in a recent interview with PYMNTS. “In our case, because the platform was built initially focusing on cryptocurrency payments, we managed to build all the risk management and payment gateways and partnered with the right payment platforms to allow us to do it in a way that was safe, secure and scalable.”

Otero offered PYMNTS an inside look at the obstacles Travala navigates when processing cryptocurrency payments and why effective onboarding and authentication is a crucial facet of the entire customer experience.

Challenges of Crypto

One of the perennial challenges with accepting cryptocurrency payments is its long and energy-demanding processing time. It requires computers to comb through the blockchain to ensure the payor is the currency’s legitimate owner and then add the transaction to the blockchain. This process can take just a few minutes for low-value transactions, but larger transactions can take hours or even days. Lowering this payment time was a key priority for Travala.

“With bitcoin, we do what’s called phase confirmation, which means that we also integrate the Bitcoin Lightning Network,” said Otero. “We also allow a longer window of time for the payment to be confirmed before the booking is confirmed by identifying those transactions on the network even before final confirmation is done.”

Merchants that accept cryptocurrency must also ensure customers can navigate a seamless and easy payment process while dealing with the obstacles that come with cryptocurrency payments.

“It’s a balance of managing some of the issues that you might encounter when paying with crypto, like network congestions if you pay with [ether] or bitcoin,” said Otero. “We had to build the technology around making sure that we were able to scale because we don’t want someone waiting 20 minutes for an [ether] payment.”

Another major challenge is ensuring that users are who they say they are and are not cryptocurrency thieves in disguise. Fortunately for Travala, the very nature of the travel industry helps them in this regard.

Ensuring Secure User Authentication

One factor making customer onboarding and authentication easier is detailed identity information from airlines and hotels before travel, such as passport numbers, federal identity documents and several other items. Cryptocurrency users often chafe at this lack of anonymity, but in the travel industry, it is a necessity.

“One of the advantages we have is that when you want to book travel, do you have to provide personal information to make a booking, down to your passport details and everything?” said Otero. “You can’t book a flight without providing your passport. You can’t check into a hotel without your ID. So for us, we have a much higher level of identity verification when it comes to payments because of the nature of booking travel.”

Otero hopes these secure authentication systems will help the cryptocurrency-enabled travel industry grow in the coming years, especially if the pandemic finally begins to subside. Consumers are always looking for new alternative payment types, and cryptocurrency could prove an enticing option as long as fraud and other challenges are kept at bay through proper authentication.

“We’ve seen cryptocurrency payment options continuously increase in usage,” Otero said. “For example, last year we were doing approximately 70%, but this year is up to 80%. [Cryptocurrency could] offer an alternative to traditional online travel agencies and give users more choice, more transparency and more security when it comes to paying [for] and booking travel.”

Cryptocurrency certainly has its teething issues for now, but as the technology continues to mature, it could serve as an essential alternative payment method for decades to come.