Mobile is expected to impact every aspect of the traveller's journey in the future and 57% of airlines agree that mobile payments will present the greatest revenue opportunities in the next five years.
Despite this, mobile payment for travel is still in its infancy. In fact, the vast majority of travellers (71%) are not yet using mobile as a payment mechanism for corporate travel, according to a recent survey by ACTE and AirPlus. This is despite an increase in new technologies, lower barriers to entry and new players disrupting the value chain with an increasing spread of alternative payment methods.
So why is the travel industry, particularly corporate travel, failing to fully embrace mobile payment? Firstly, it still remains a relatively new technology area and although travel managers have a general awareness of mobile payment they are yet to implement it. According to the Association of Corporate Travel Executives (ACTE), understanding of mobile payment is currently at a beginner (53%) or moderate (41%) level.
Specifically, it seems that there is a lack of knowledge around the benefits of mobile payment in travel. For example, more than one third of travel managers said they don't know the advantages of using mobile as a payment mechanism, according to the ACTE/AirPlus survey.
So what's in it for the corporate travel manager?
There are clearly a number of benefits to implementing mobile payment in corporate travel, both for the travel manager and the end traveller, with the possibility that your overall travel programme will be strengthened. Mobile payment encourages faster payment in different currencies, reduces conversion fees and also makes it more efficient to track travellers by their payment history.
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Mobile payment is still in its infancy for the travel sectorMobile payment also offers convenience through greater sophistication, real-time policy management and point of sale compliance checks. Also, improved data capabilities will make life easier with more robust and reconciled data which potentially takes the manager a step closer to the elusive total trip cost calculations they desire. A quoted rate and the actual payment made can be matched if the traveller accesses their hotel booking through a mobile itinerary application. It tends to be hard to achieve reconciliation manually as the departure payment total is normally more than the booked price due to charges incurred for extras.
With a mobile payment a data match can be made via GPS which finds the hotel location where the traveller is about to make a payment and matches it to the booked price. The traveller is then asked to confirm if the match is correct, which results in a vast improvement in the reconciliation with the original booking data. This will enable travel managers to see how much travellers spend on extras and whether the paid room rate and booked room rate match. Another additional benefit is that data can be shared with budget managers real-time so they can see how much is currently being spent on travel and if it is within budget.
And what are the benefits of mobile payment for the end traveller?
By nature, travel is an industry reliant upon 'on the move' transactions and therefore mobile payment meets a very real solution for the modern business traveller. In recent years, shopping behaviour has shifted as customers become increasingly comfortable using different payment methods across multiple channels and devices. Research from SITA now indicates that 48% of passengers would definitely use smartphone payment services and around 35% say they may use it.
Convenience and tracking ability are perceived to be the biggest benefits of mobile payments, with a total of 57% of travellers deeming them to be a more convenient form of payment during a trip (ACTE/AirPlus). Mobile payments also appear in the traveller's reporting tool in real time, allowing immediate management and reducing the need to complete their expenses post-trip.
So "how do I sign up?" I hear you ask. There are some issues to consider before rushing out and implementing the first mobile solution you come across and these are arguably why the take up to date has been a little slower than we might have expected.
Before mobile payment can be fully integrated with the relevant systems, corporate travel buyers must implement security measures to counteract fraud and potential mobile hacking. This shouldn't act as a road block to implementation and fraud prevention is constantly evolving and getting stronger, but it should be part of any organisation's due diligence when it comes to mobile payments.
Some would argue that there are always concerns surrounding security when it comes to new technologies and mobile may ultimately be more secure than card payments. And it's also worth noting here that despite the growing popularity of mobile payment and the obvious benefits, card payment will remain a key option for many organisations, particularly for large transaction amounts. However, it seems true to say that travel management companies can no longer offer only credit and debit card as payment methods.
A considerable opportunity to get ahead
The infancy of mobile payment in travel presents a considerable opportunity for the early adopter corporate travel manager to get ahead of the competition and enhance the travel experience for the business traveller. In an industry which is constantly evolving and increasingly complex, mobile payment presents a way to add real value for the busy corporate traveller and increase revenue as a result. And the rewards are great. Business travellers will gravitate towards a company-managed process that makes their lives easier and their travel more efficient.
We believe that the future looks big for mobile payment in corporate travel and Capgemini predicts there will be one billion mobile payment users worldwide by the end of 2015. Additionally, growing traveller demand for mobile payment is driving airlines to implement it. And, alternative payments is expected to account for 59% of all online transactions in 2017 (up from 43% in 2012), driven by growth in eWallets which will account for 40% of all transaction methods by 2017. Therefore, can you afford not to grab this opportunity with both hands?