With the pace of innovation in the payments sector increasing, new research shows the travel industry is ready to take payments to the next level.
The new study, conducted by PYMNTS and commissioned by Amadeus, conducted 78 interviews with payments managers from hotels, airlines and travel intermediaries. More than 95 per cent of those polled plan to introduce new payment innovations in the near future, while 14 per cent said they are planning ‘a lot of new innovations’.
When asked what is driving these companies’ innovation, the majority cited meeting customer needs and a continued focus on delivering more personalised experiences as major objectives.
Despite their eagerness to push ahead, the companies surveyed said complexity in the payments landscape remains a major barrier to innovation. The majority (85 per cent) said the number of payment types they accept has increased in the last five years, with the average company now accepting nine methods after adding an average of three new ones over the last several years.
Similarly, more than 80 per cent of travel providers said they now work with between three and ten different suppliers of payment services, which they agreed added further operational complexities.
The survey also found that travel firms spend on average 5.3 per cent of their revenue on managing payments, including acquiring and provider fees and other indirect costs. This equates to US$74.5 billion across the industry, with smaller firms paying disproportionately high fees of up to 7.5 per cent of revenue and larger companies paying less (3.8 per cent).
Bart Tompkins, managing director of payments at Amadeus, commented: “The travel industry is standing at a tipping point in payments innovation. The next few years are a real chance for the industry to improve the customer experience and the manage costs through innovation with a host of advances in fintech. Our advice to those companies looking to innovate in payments is to take a strategic approach: define what is a core competitive advantage and what should be outsourced. Then, when evaluating future innovations, focus only on those which improve customer experience, address complexity, or reduce direct or indirect costs.
“The travel industry is more international than any other, requiring payment methods that cater to a global customer base and a host of government regulations that must be managed. Despite these challenges, it’s clear the promise of delivering a more personalised experience is causing the industry to look again at how payments can deliver a competitive advantage.”
Read the full results of the research at amadeus.com/payments-research