The growing convergence of finance with travel is certainly one of the most significant and exciting developments in travel technology in recent years. The adoption of new payment methods by travel providers is occurring at a rapid rate. The following are the trends that will shape travel fintech in 2023.
B2B Payment Method
Open banking is one of the most major changes in financial services. In other words, customers can now opt to share their financial data with third-party companies that provide value-added services. The types of organizations that can “interact” with a bank account are also expanded with open banking. Payment initiation service providers, for example, can initiate a transaction from a personal or business bank account without requiring the account owner to do so.
This shift will soon provide travel marketers with more options when it comes to paying suppliers like airlines. Sellers can now use industry settlement mechanisms, cards, or virtual cards to receive payment. In the travel industry, open banking adds a fourth main B2B payment method: direct bank-to-bank payments between the seller and the supplier. Soon, sellers will be able to pay from their bank account utilizing existing banking rails, which are both cost-effective and reliable.
Companies can use Jeton to get a personalized IBAN and a multi-currency account to spend, accept, and store money. The website is simple to use and browse, and transfers are quick and easy. Credit cards, extending credit, payment portals like Jeton, and so on are the most frequent B2B payment options.
Buy now, pay later (BNPL) is already a popular method of payment in the retail industry. A merchant can opt to issue a line of credit to a consumer by performing a quick risk assessment of the customer, allowing the customer to pay in installments. BNPL is a very seamless process for travelers, much faster and easier than applying for a typical loan.
However, the concept isn’t entirely new. Credit cards and layaway have been around since the beginning of time, but BNPL is the current version of credit suited for the digital age. Allowing for flexible payment by installments is very crucial for the travel sector right now since family reunions are driving travel demand, and these trips frequently involve four or more people, which can be costly.
The main opportunity for travel businesses is upselling products. If the traveler has access to flexible financing, he or she may be able to purchase a higher-value item or add more auxiliary services.
We anticipate that by 2023, every travel merchant will at least investigate BNPL choices because of the possibility of upselling. Offering this type of payment mechanism, however, is not without danger. Travel businesses must examine any brand risk that may arise as a result of a BNPL partner aggressively selling credit to travelers who are already heavily in debt.
Contactless mobile payments are becoming more popular as individuals consider their phones as a safer way to pay. They’re also using payment-related mobile apps, such as Jeton, to place grocery delivery or pickup orders. When we consider how payments can actually offer value to the travel industry, it all comes down to minimizing friction: making it easy for travelers to pay digitally, easily, and swiftly. That’s how we can boost passenger pleasure and loyalty while also streamlining the payment process to encourage more purchases during the stay.