Emirates has just launched a new payment option for customers, which could have major implications.
Emirates Pay, new account-based payment method
Emirates has just introduced Emirates Pay for customers in Germany and the United Kingdom, with plans to expand this to other countries soon. This is a new account-based payment method for purchasing airline tickets via emirates.com.
This is a white-label solution that was jointly developed by the International Air Transport Association (IATA) and Deutsche Bank. This is intended to be an alternative payment method for travelers looking to pay for airline tickets by having their bank accounts debited in real time.
The way it works, Emirates will provide all the necessary account and payment information, and passengers will approve the payment initiation in a convenient way via their online or mobile banking.
As the benefits of this are described:
- This allows airlines a significantly more economical way to process transactions, with faster settlement times, supporting enhanced airline liquidity and reduced payment fraud
- This allows customers to “address the demand for more secure and frictionless payment options, including account-to-account payments, for which a card is not required
As it stands, 60-70% of Emirates flights are paid for by credit card, while the remainder are paid for with country-specific payment options. Emirates is considering eventually incentivizing customers to use this payment option, and could offer perks like a bigger luggage allowance, an upgrade to seats with more legroom, or even special fares that can only be booked with Emirates Pay.
Why this has the potential to be major
Emirates’ motive here is pretty clear — on average, credit card transaction fees are somewhere around 1-3%, with a company like Emirates probably paying on the lower end of that. That doesn’t even account for credit card fraud, disputed…