Airlines see a potential for driving revenues from mobile payments, according to research from London-based processor WorldPay. For its “Alternative Payment and Distribution Landscape: Airlines and Alternative Payments – The Facts” report, WorldPay questioned 56 global airline carriers worldwide on their use of alternative payments methods, their plans for the future and the reasons for their choices.
The acceptance of mobile payments by airlines has grown from 10 percent in 2012 to 25 percent in 2013, WorldPay said. Airlines are looking to mobile payments to drive revenue, with 57 percent of airlines saying mobile has the greatest potential to do that over the next two years.
Reaching new customer segments was the top reason cited for offering a range of online payment options, given by 63 percent of airlines. This was followed by lower payment processing fees (61 percent) and lower fraud rates (50 percent).
Top payment methods accepted by airlines in 2013 were credit cards (96 percent of respondents), charge cards (86 percent), debit cards (64 percent), air miles/loyalty points (54 percent) and e-wallets (38 percent), the survey found.
Looking to the future, a third (32 percent) of airlines said they plan to offer mobile payments in the next two years, with e-wallets (29 percent) and online bank transfers (29 percent) also on the development radar.
“Airlines have recognized the revenue opportunities of mobile,” Mike Parkinson, WorldPay’s VP of Airlines, said in a statement. “Over the next two years, we can expect to see new innovations in the ways consumers purchase tickets and services via mobile devices from airlines. Eventually, services offered via mobile devices will become inherent to the airline experience, from booking to check-in.”
However, implementing alternative payment systems has its challenges. “Direct integration with a payment type is too complex both from an IT aspect as well as from an accounting and reconciliation perspective,” Maarten Rooijers, KLM’s senior manager of e-payments, said in a statement.
Parkinson recommended that airlines work with a payments partner who can manage the integration with current processes.