Cashless Payment: Travel Companies Will Drive ‘WeChat’-like Mobile Solutions
Ordering and paying for goods and services online is nothing new. But there’s now a rapidly growing trend toward handling transactions of this kind on the move – including via mobile social apps. In China, apps of this kind have caught on in a big way, driving sales in a variety of sectors. And it can only be a matter of time before they gain similar traction in the West. To avoid missing out on vital revenue, travel players need to start making plans now – particularly in the area of digital payment.
Paying on the Move: China Shows the Way… In recent years, China has seen impressive growth in the use of mobile social apps that allow users not only to find and order, but also pay for a wide range of goods and services – from groceries all the way through to flights and hotel accommodation. The numbers speak for themselves:
With 1 billion active monthly users, Tencent’s all-in-one WeChatsolution directly drives USD 1.76 billion in lifestyle spending.
In the travel sector, Ctrip– China’s leading online travel service provider – saw revenue jump by 26% year-on-year in Q4 2017 to a massive USD 4.1 billionfor the year as a whole.
And Alibaba’s rebranded Fliggytravel platform aims to boost the company’s total revenue of USD 39.9 billion(2017) by wooing Generation Z customers away from competitor Ctrip.
These are impressive figures. But for travel players, embracing apps of this kind is not primarily about boosting the bottom line. Rather, the issue here is to meet the demands of today’s increasingly tech-savvy customers for convenient app-enhanced services – and thereby avoid losing customers and revenue. And this is particularly true when it comes to the application area with perhaps the greatest disruptive potential: mobile payment.
… with Europe Poised to Follow It’s not only in China that mobile payment is gaining ground. Sweden, to name just one Western country, has seen a growing trend toward secure, convenient cashless payments. And other nations are also giving digital currencies serious consideration.
While widespread uptake of digital payments in the West faces greater regulatory hurdles (especially as regards data privacy), all the signs are that it won’t be long before app-enabled mobile payment catches on here, too. The following real-world use cases give a foretaste of what may be just around the corner.
LHR Expands Footprint of Digital Wallet Services To boost spending at its terminals, London Heathrow (LHR)is enabling passengers from China and other countries to make payments using services such as WeChat Pay and Alipay. The airport is targeting customers through its presence on social media platforms, including WeChat and Weibo, as well as by scaling up its existing infrastructure for digital wallet payments.
As part of this drive, LHR aims to bring on board other luxury brands alongside those already represented, and may also include aspirational brands further down the line. According to a recent forecast, the airport is looking to grow its retail income per passenger by 3.1% this year.
Information on Munich’s Sights – Plus Built-in Payment Option Alipay recently launched its new in-app travel guidein Chinese for visitors to Munich’s world-famous Oktoberfest beer festival and “Viktualienmarkt” marketplace. The mobile service not only offers a wealth of information on the two popular locations, including maps and handy tips on everyday German cultural norms – it also allows visitors to pay for their purchases using the Alipay app.
Shape up for the Mobile Future As these examples show, far from being a vision of the distant future, mobile payment is already with us today. In fact, use of e-walletshas now outstripped use of debit cards in the USA, with credit card usage also expected to dwindle over the coming years. At the same time, there is growing demand from travelers – particularly those from Generation Z – for rich and enjoyable online experiences that include embedded mobile payment services.
To keep pace with these trends and avoid losing fiercely contested revenue, travel companies will have to come up with innovative and attractive apps with mobile payment solutions to retain existing customers and win new ones. It’s hardly surprising, then, that many players in the sector consider ramping up innovation a priority. However, only 15% of these companies have actually made efforts to introduce mission-critical new payment approaches.
Get Assistance from the E-Payment Experts So how are travel providers to master these complex challenges? Amadeus payments expert Bart Tompkins advises them to enlist the support of specialist external partnersto do the heavy lifting and deliver the state-of-the-art payment offerings customers demand.
In view of the importance of mobile payments for the sector going forward – and given the associated risk of lost sales – now’s the time to start thinking through your options for paying on the move. And the approach proposed by Tompkins is one that’s well worth considering.