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More payment options than ever

Published on  19 March by Thomas Knierim , Senior Manager, Market Insight
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How would you like to pay for this, Sir?

I know what you are thinking: “I wouldn’t.” At least that is what I am thinking, but unfortunately most things are not free. Normally you have to pay for it, one way or another, but the good news is: Passengers have now more payment options than ever.

Credit and debit cards have long been the payment method of choice for online transactions. But by 2017 alternative schemes will overtake cards for products and services purchased online, with alternative payments accounting for 59% of all transactions.

The most significant growth trend is expected for e-wallets such as PayPal, AliPay, ApplePay. By 2017 e-wallet transaction value is set to rise by US $1,361 billion to 41% of all alternative payment transactions. While the market for U.S. mobile payments alone will expand from $52 billion in 2014 to $142 billion by 2019, according to recent reports by Forrester Research, significant regional variations exist, with China showing the largest proportion of e-wallet payments globally at 44%.

So, what are airlines going to do?

Alternative payment methods are touted as a disruptive technology, which is affecting all industries including the air transport industry. Already, 71% of airlines say that mobile is the future of airline payments, according to WorldPay.

It is well known that airlines are planning to focus on mobile as a distribution channel in particular for its opportunity to sell more ancillary services, but there is an increasing interest in mobile as an alternative payment method.

Despite its problems (cost, fraud), cards are still the most popular payment method used by passengers to pay for goods and services on-board and online, but alternative payment methods are growing in popularity. According to WorldPay, 83% of airlines believe improvement and deployment of new payment technology is a major business priority.

But it will not stop here! This disruptive trend will not only affects airlines websites and mobile channels, it will also have a profound effect on other self-service channels. Take kiosks for example, most deployed airport kiosks do not process payment transactions today. With almost 60% of airlines wanting to sell services via kiosk by 2017 (SITA Airline IT Trends Survey 2014), enabling card payments is a minimum requirement for the kiosk of the future.

In-flight services are no different. With the availability of in-flight connectivity services and the popularity of crew tablets, airlines will also consider their payment options on board.

So, as we all have no option but to pay for what we need, let’s make sure passengers can pay the way they want.

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