Airlines worldwide are increasingly accepting alternative payment methods for both ticket purchases and in-flight amenities. However, they are still struggling to provide enough alternatives to meet their passengers’ needs.
Data from CellPoint Digital, titled Payments Come of Age: A Global Study of Airlines and Their Payment Technology Needs and Challenges, found that 62% of airlines already accept alternative payment methods. Indeed, 30% of respondents had implemented buy now, pay later (BNPL) services, while nearly as many have used online bank transfers (26%) and offer pay-by-link (24%).
These features are often region-specific. More than a third of airlines serving Latin America, for example, are investing in installment payment capabilities, which is a greater share than their European and Asian counterparts, responding to the demand for BNPL in the Latin market.
At the same time, many respondents felt there weren’t enough alternative payment methods available, and that was a concern. Only 11% of those surveyed said they could accept newer alternative payment models (APMs) like open banking and account-to-account payments. This is especially concerning in markets like Southeast Asia, where APMs are increasingly used for travel purchases.
Another significant concern for airlines is the lack of foreign currency support. Offerings such as dynamic currency conversion and multi-currency processing were frequently mentioned as areas needing improvement.
Investing in Upgrades
In the immediate future, more than a third of respondents said they plan to invest in support for digital wallets like Apple Pay and Google Pay within the next year. They are also looking at split payment capabilities, stored cards, and currency conversion.
It’s clear that many airlines are considering upgrading their payment capabilities, with 77% of respondents saying they are not happy with the flexibility their platform provides. While less than half of airline professionals are “very” satisfied with their payment technology, only 23% said they’re confident about making changes on their own.
Several factors are preventing airlines from making payment improvements. Nearly half of the airline professionals surveyed said the top reason preventing them from switching to a new vendor for their payment technology is the potential complications to reporting and reconciliation processes.
Reconciliation, which encompasses extracting, aggregating, and comparing transaction records for accounting purposes, can be a particularly acute problem for airlines. They need to be able to accept payments in multiple channels and currencies and by multiple methods—and settle transactions in multiple geographies. The next generation of airline payment processors will have to be sensitive to this concern.
