Last week I joined a gathering of travel payment luminaries in Hong Kong at the annual UATP Travel Payments conference. Datalex is a proud sponsor of UATP’s conference (Universal Air Travel Plan); UATP provide a proprietary payment network owned and operated by, and for the benefit of, the global airline industry. Their product provides significant savings over traditional credit card / payment fees.
The theme for the conference was disruption, something we live and breathe at Datalex - it’s why we exist!
Payment is undergoing dramatic transformation and Patrick Diemer, MD of AirPlus, illustrated this point clearly. Since 1950 there have been 4-5 options for payment, all provided by the big payment credit card brands. Fueled by our ubiquitous personal digital devices, in the last 5 years we have seen an explosion of new forms of payment. Our devices are always on. They have security, location data and instant access to funds baked into their DNA - a different proposition to a slice of plastic.
Like any modern travel conference the usual suspects were all given panels – NDC, merchandising, the future of the GDS – and we heard the usual talking points.
So what was different this year? There were a few recurring themes:
A common acknowledgement that payment fees were now a bigger challenge than GDS fees.
- As the business moves to direct ARC and the BSPs are not at that table, their systems support the indirect channel and have not considered direct.
- IATA are banging the drum, riding the political success of NDC and One Order, along with their new focus on payments and how they can act as a guarantor for B2B direct payment.
While the conference detailed concerns and needs for reactive changes to keep ahead of disruption in payments, tangible changes in strategy and approach were not discussed. My gut tells me that this is just another priority for the airline, which is trying to get to grips with the extensive change programs necessary to become digital retailers.
I will call out a couple of exciting new participants at the show. These guys give me hope that while the industry may be slow, new ideas and companies are already building capability to help transform the payment landscape:
- Affirm: Providing on-the-spot credit decisions, and installment plans for air purchase via a virtual card.
- Planet Payment: On-the-fly Forex capability giving the airline and consumer a joint share in what is usually a lose/lose proposition for trans-border payment.
- Trustly: A European-based marketplace for bank direct payment. Given the EU PSD2 directive’s push for open access to local banking APIs, Trustly can save the industry from dealing with a swarm of banking APIs.
- Perseuss: Taking a social network approach to fraud prevention, airlines can securely share information about fraudulent activities providing a real-time fraud detection capability.
What I like about all of these guys is that they are aligned with the key challenges airlines face on payment:
- The consumer wants a frictionless payment process.
- The consumer is moving away from credit and towards alternative payment providers and plans, such as installment and cash/social payment.
- Downward pressure on prices. The cost of payments is now a barrier to success.
Datalex today deals with several alternate payment players, as well as offering a credit management facility for B2B travel. Th UATP conference underlines the need for airlines and their system providers to take a lesson from payment startups, and understand the competitive advantage of embracing a diverse payment strategy.
Gianni Cataldo,
Vice President of Product and General Manager of Datalex Americas
