How COVID has Shaped B2B Travel Payments
- Covid-19 , Payments
- 08.09.2021 01:20 pm
The travel industry is seeing signs of recovery as the vaccine rollout builds momentum across various regions globally. With International borders opening up, travel is set for a rebound as people are hungry to get out and see the world again. According to the International Air Transport Association (IATA), it has been predicted that in 2021, passenger numbers are expected to grow to 2.8 billion. But with continued uncertainty and the rise of new COVID-19 variants, the rebound is by no means straightforward.
As such, we’re noticing that existing consumer trends are becoming more intensified And are impacting how travel businesses interact with their customers during this complex rebound. In particular, these trends create a redefined role for the travel payments provider, as they focus on offering more choice, enhanced fraud protection, better technology infrastructure and payment efficiencies for customers.
Demand is soaring for more travel payment choices
We’re seeing a clear demand from travel customers for greater flexibility on how and when they pay for travel. As a result of this, the appeal for Buy Now, Pay Later (BNPL) schemes and payment installment options are on the rise. According to IATA’s recent market report, BNPL services have enjoyed special attention both from merchants and consumers since the start of the pandemic.
Given this backdrop, payment providers will need to invest in their technology stack in order to help travel companies meet this increased demand for flexibility; those providers that can offer the most choice to their customers will be the most competitive in the post-pandemic world.
Travellers need greater security against payment fraud
While consumers reduced their travel spending in 2020, fraudsters didn’t cut back. Based on data from Sift’s Q1 2021 Digital Trust & Safety Index, fraud attempts increased across a range industries to take advantage of the changes occurring in many of them. The online travel segment alone saw a 20% increase in fraud attempts. This, in turn, has heightened the need for payments providers to offer protection and security that travel businesses need to reassure their customers and get them back to travelling.
While the use of Virtual Cards (VC) was already on the rise pre-pandemic, demand is set to accelerate as its benefits can help travel companies build trust among their customers. Virtual Card Numbers (VCNs) offer an attractive alternative to traditional cards and have features to protect against fraud. For example, VCNs can be set-up to only be used once, so even if the data is subject to a breach, the card cannot be used again if the supplier has already processed the payment. In addition, with VCNs, parameters can be set to control the types of purchases accepted, the maximum purchase amount, and when the purchases can be made. This prevents any charge other than that which is specified. And is a great safeguard against fraud.
Greater demand for cloud infrastructure
As travel rebounds, the on-and-off nature of global restrictions and complex travel rules means that businesses need to be as agile and flexible as possible to reassure their customers. For payment providers, cloud-based solutions have been recognized for their agility and reliability and ‘always on’ nature that businesses need to rely-on to manage workflows during this time. Synergy Research Group found that cloud spending is up and has not been hampered by the ongoing COVID crisis. Q1 2020 spend on cloud infrastructure services reached $29bn, up 37% over the same time last year. It is likely that travel companies will be looking to payment providers that can offer this reliable technology and remain agile during times of continued uncertainty.
Payment providers can make things easier for travel businesses
With parts of the world reopening, the increased travel demand presents great opportunities for OTAs and booking providers. But as the priority for these businesses will be getting people out of the door and on holidays, there’s an opportunity for payment providers to step up and help travel intermediaries meet the demand across their entire supply chain.
How? By providing end-to-end payment solutions, payment providers, can offer businesses greater efficiencies, help them benefit from automating back-end payment processes, and support them mitigate against the risks that manual, cash-based payment systems present. All of this will be critical for industry recovery. In addition, we are now seeing virtual cards for general accounts payable and other key areas, helping businesses get paid on time - and at this crucial time, that is the engine keeping the economy going.
A brighter future is on the horizon for the travel industry, and the travel payments providers that support them. With the industry now bracing itself for the rebound, partnering with a payment provider such as WEX, and the use of Virtual Cards, can help make payments and processes safer and easier. Ultimately allowing travel companies to focus on what they do best – ensuring their customer gets their dream trip, hassle free.