October 25 2023  |  Tech & Hardware

Guest Column: A better way to pay

By Greg Worch, Head of Revenue, CellPoint Digital

Greg Worch, Head of Revenue, CellPoint Digital

Of all the variables that comprise the airline passenger experience, one of the constants is payment. Whichever airline a passenger chooses, they’ll need to pay for a ticket, possibly buy upgrades and ancillaries, and make in-cabin purchases. Increasingly, all of those payments are governed by Payment Orchestration systems, which have gained traction across the airline industry for their ability to reduce complexity and boost efficiency around transactions for airlines. But how does it impact on the passenger experience?

What is payment orchestration?
Payment Orchestration, put simply, is the end-to-end management of all components of a payment, from authorization to routing to settlement to reporting. For airlines, it creates a more transparent, flexible payment ecosystem that can easily accommodate multiple PSPs and acquirers, route transactions intelligently to boost acceptance, integrate multiple payment methods, and facilitate more conversions in direct and indirect sales channels.

This description won’t mean anything to passengers as the payment processes it impacts on are entirely behind the scenes. In fact, from the passenger’s perspective, the entire purpose of Payment Orchestration is to be invisible. It’s the outcomes of Payment Orchestration that impact the passenger experience, and they begin with minimizing interruptions at checkout.

Streamline the checkout process and reduce cart abandonment
Direct-channel bookings – that is, bookings made through an airline’s website or app – are many airlines’ bread and butter. And they invest in making these channels as feature-rich as possible to maximise bookings. But at the payment phase of the booking transaction, the experience can break down due to integrations that don’t account for how the user is journeying through the booking flow. More than 23 percent of airline customers will abandon the booking process and more than 10 percent claim it is because of a payment issue.

Payment Orchestration, by giving airlines more control over their processes, allows them to craft the ideal payment experience, streamlining the act of booking and reducing transaction abandonment. This can include leveraging different payment methods for each customer category or collaborating with local payment providers to define an operating model that best suits local customers.

Easily integrate new alternative payment methods
When it comes to leveraging different kinds of payments, that means supporting alternative payment methods or APMs. Credit card usage is falling as consumers – particularly younger generations – embrace APMs; in fact, only half of all Millennials own a credit card, and of those who don’t, 93 percent never plan to. APMs have stepped into that breach and are increasingly the preferred choice for transactions of all kinds, including travel payments.

But APMs are constantly evolving, with new ones emerging every day. They also tend to be regional; for instance, the most popular APM in China (AliPay) is unavailable even in neighbouring India, where Paytm is the dominant digital payment method. Airlines need both the flexibility to introduce new APMs to meet demand and the ability to support a range of APMs to serve passengers in multiple markets. Payment Orchestration enables airlines to deploy and retract any APM with the click of a button, providing complete control over their payment ecosystem.

Enables more convenience passenger payments at every point in the journey
In addition to making introducing and supporting APMs easier, Payment Orchestration also connects the various payment types a passenger might make throughout their journey into one centralized system. This means a passenger can pay for their core fare in the same manner and with the same method they use to purchase in-flight WiFi or post-booking travel insurance. Payment Orchestration also helps fill a gap in the post-transaction period.

According to a survey conducted by Outpayce, only one in five airlines have an automated chargeback dispute process in place despite the increase in chargebacks during the pandemic. Most Payment Orchestration platforms feature just such an automated process for chargebacks.

Payment Orchestration may be an obscure industry term to passengers, but it plays an outsized role in determining the smoothness and quality of their experience.

Airlines that prioritize their passengers’ experience, as most claim to do, will find that adopting Payment Orchestration will help them achieve their goals and streamline the payment processes that their passengers encounter.

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