Increasing optionality in travel payments is helping to keep the sector’s rebound rolling.
Al Enes, vice president of gig economy and travel at payments platform Nuvei, told PYMNTS it’s no mystery that two-plus years of pent-up demand was unleashed early in the year and led to year-over-year increases in air traffic. Payment options play a crucial role in this.
“Local payment methods are key to unlocking certain jurisdictions,” Enes said. “The easiest way to think about it would be you’re more comfortable transacting in your local currency because you understand what that is.”
It’s much the same with payment methods, as the ability to transact with your preferred payment tool gives travelers confidence that transactions will go through and that their details are safe.
It’s a reality, he said, that travel sellers need to understand and, in turn, bring consumers more of what they know and want.
“Things like digital wallets, which grew tremendously during the pandemic, are very valuable to sellers of travel,” he said. “Also, buy now pay later, which has just skyrocketed through the pandemic, and in travel specifically.”
A focus on revenue acceleration is also helping the rebound in travel, and Enes said travel suppliers and online travel agencies (OTAs) must provide more local options — and payment options overall — to keep bookings flowing faster.
“The more you accept, potentially, the more transactions that you’re able to convert,” he said, noting the conversion rate benefits of having an alternative payment method ready to go if a credit card transaction is declined.
See also: Businesses Can Now Embed Payments Through Nuvei for Platforms
Direct Selling is the Ticket for Suppliers
Nuvei’s platform currently supports close to 600 different payment methods, and new customers, including Virgin Atlantic, are experiencing the many ways that integrating with a payments platform can boost revenues.
While he said many OTAs and airlines are “very forward and very in tune” with the benefits of payments optionality, not all sellers of travel support payment options that guarantee maximum conversions.
If there is a current void in the market, he said it’s in the supplier space.
“[Direct bookings] have tremendous value for the actual providers of travel services because they don’t have to pay a commission,” he said. “If they can generate and capture more direct bookings, that is a massive way in which they can accelerate their revenue,” he said.
See also: Nuvei Reports 30% Growth in Payments Processing Volume
Business Travel, Events Gaining
Looking to 2023, Enes said he sees continued gains in travel at a time of increased remote work and a return of events and business travel needed to support face time with clients and customers.
“Events have been packed,” he said, predicting the new business travel trend will continue next year as more territories end COVID-19 restrictions, particularly China.
As to how payment methods play into all of this, he said many travel suppliers are currently looking to their digital flow, especially in direct bookings, which he said offer “massive value.”
Any payment method that has authorization works well in the travel space, he said.
“If you think about the travel industry, you need that authorization to ensure that that transaction went through. If there’s a delay in authorization you can still make it work, but your business logic has to match up with that as well,” he said.
This is where digital wallets, BNPL and even bank transfers are finding more application in the travel space and will play an increasing role in its recovery, especially for in-country services.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More