How can airlines design an omnichannel payments strategy for traveler-centric retailing?

Airlines are embarking on a major transformation to become modern retailers. This business change is designed to empower carriers to retail their own and third-party products and to offer a customer-centric experience in a similar way to businesses like Amazon. There are many considerations involved. From how to build a single view of the customer to delivering the offer across an airline’s many different touchpoints.

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rn The recent launch of Amadeus Nevio rn provides airlines with modular technology for retailing, servicing and delivery. This new generation of airline technology is designed to support every aspect of the retailing transformation and customer journey, across an airline’s entire operation – helping them deliver compelling, contextualized offers effectively across every touchpoint and every interaction. My colleague Maher Koubaa explains more about the development in his blog rn.

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rn Some forward-looking airlines are already making modern retailing a reality. For example, Amadeus has been working with Finnair for the past year - with dynamic offer pricing already successfully piloted - as the airline looks to bring personalization and real-time insights through the adoption of Offers and Orders. The Nevio module for Order Management is live in production today, with millions of order records created. Finally, Saudia rn recently signaled its commitment to becoming even more guest-centric by choosing Amadeus Nevio.

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rn So, how does payments fit in? rn One of the most important (but sometimes overlooked) elements of being an effective retailer is how to handle payments. When you pay through Amazon or Uber the process is invisible. These companies have your payment method on file. There aren’t confusing foreign exchange conversions to deal with. The payment is tightly reconciled to your order or trip. In Amazon’s case, the company settles efficiently with retailers supplying products through its marketplace. rn

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rn I also very much expect the global payments Amazon accepts across the world to be efficiently routed and processed according to their unique characteristics, like fraud risk, transaction value and cost. To be traveler-centric retailers, airlines need similar capabilities designed for the specifics of their industry.

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rn At Outpayce, we have been investing so airlines can access a single platform to deliver on these requirements. Our Xchange Payments Platform (XPP) is used by airlines irrespective of their underlying retailing technology. Although, it brings additional benefits when deployed alongside Amadeus Nevio.

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rn How can airlines enable exceptional payment experiences? rn As with retailing, effective payments need to be traveler-centric. Travelers need to be able to pay in the way they choose, be that a card, a digital wallet or a local method popular in their country.

rn The payments experience should be personalized too. Airlines should know how a traveler has previously paid and suggest this option as default. They should know when an option like Buy Now Pay Later rn is appropriate for a customer and when it’s not.

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rn The offer should be priced transparently in the traveler’s native currency to boost conversion. Afterall, if the airline has invested to dynamically package a compelling offer and it is then presented to the traveler in an unfamiliar currency, this undermines the purchase experience and risks losing the sale. But simple payments aren’t just key for the website. They’re needed everywhere.

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rn Here, airlines face greater complexity than companies like Amazon or Uber. For retailing to be a success, the airport too needs to become a retailing hotspot. Self-service kiosks and bag-drop evolves from ‘just a travel process’ to yet another opportunity to make relevant offers based on improved customer understanding.

rn The trouble is, paying for ancillary services at the airport today can still be difficult and from an airline’s perspective, most ‘common use’ payment set-ups at the airport aren’t able to reconcile ancillary sales to the specific booking. This results in significant manual work and difficulties in revenue accounting.

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rn That’s why Outpayce designed a range of payments services that allow travelers to easily pay at any self-serve or agent-assisted touchpoint in the terminal. The traveler can choose to receive a link sent to their mobile so they can quickly pay for in-person purchases, using a service like Apple Pay. Just like airlines, we’re also thinking about the complete omni-channel experience.

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rn How can payments help airlines make modern retailing a reality? rn As airlines transition to modern retailing, they will move away from PNRs, Tickets and EMDs and replace them with an offer and a single order record. This simplification is welcome and unlocks new opportunities to better personalize offers as well as delivering a more responsive service across the traveler’s entire journey, with new approaches like digital identity rn. But the transition will take time and both standards will coexist for a number of years. Outpayce is ready to support airlines whether they choose to operate on today’s standards or make the switch.

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rn Even in this new modern retailing world, the fundamentals of payments remain consistent. Airlines must decide which payment methods to accept across different markets. They must actively design the payment experience across multiple channels and decide if they will offer currency conversion at booking.

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rn During the trip it will still be important to intelligently route transactions behind the scenes to boost acceptance rates, for example by reserving Strong Customer Authentication checks for when they’re really necessary. This is the key to smooth and invisible payments that travelers value.

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rn Whichever underlying standards an airline chooses to run its business, the ability to reconcile each and every payment to the corresponding record is key. This is crucial for effective revenue accounting and it’s also important for fulfilling the traveler’s order or issuing a refund if necessary. We can do this on an end-to-end basis, across web, mobile, in-person or through traditional or NDC distribution standards.

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rn As airlines embrace modern retailing, travel documents like visas will increasingly be pre-authorized. More passengers will choose to identify using digital identity and biometrics at the airport. These trends mean travelers will no longer rely on paper documents. Instead, travel credentials like a visa, boarding pass and digital identity will be stored on the passenger’s phone in a digital wallet.

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rn To those of us working in payments, digital wallets aren’t new. At Outpayce we help providers accept payment methods from digital wallets and for business travelers, we’re helping to put virtual cards into digital wallets for smoother on-trip payments for expenses like taxis and meals. Here we’re seeing the convergence of travel identity and payments, with big opportunities for simplification. For example, if a traveler uses biometrics at the airport to validate their travel, why not re-use that check to authenticate payment for an upgrade?

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rn The intersection of payments and loyalty is particularly important for airlines. Travelers increasingly value paying with a combination of miles and cash, which encourages them to choose higher value options and helps airlines to shed loyalty points from their balance sheets.

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rn Making it happen together rn Payments and fintech innovation move quickly. That’s why we’re opening our payments platform so airlines can access the widest range of partners and bring this innovation into their retailing experience. Like Amadeus Nevio, our payments platform is open and API-centric. Payments and fintech companies can build their own connections to our airline customers. We can use machine learning to help airlines understand which partner is best suited to their needs and the relative performance of different providers. It’s an ideal foundation for an airline that wants to modernize its approach, so the payment experience supports traveler-centric retailing.

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rn For more info, watch this video rn with David Doctor talking about simplifying and optimizing travel payments.

rn rn"}}" id="text-f60c44018c"> Airlines are embarking on a major transformation to become modern retailers. This business change is designed to empower carriers to retail their own and third-party products and to offer a customer-centric experience in a similar way to businesses like Amazon. There are many considerations involved. From how to build a single view of the customer to delivering the offer across an airline’s many different touchpoints.

The recent launch of Amadeus Nevio provides airlines with modular technology for retailing, servicing and delivery. This new generation of airline technology is designed to support every aspect of the retailing transformation and customer journey, across an airline’s entire operation – helping them deliver compelling, contextualized offers effectively across every touchpoint and every interaction. My colleague Maher Koubaa explains more about the development in his blog .