Why payment orchestration should be an investment priority for airlines
In the race to remain competitive, airlines are investing in different facets of the customer experience. Regarding IT investments, airlines spent an estimated USD 37 billion in 2022 alone, with the pandemic serving as an urgent reminder to pick up the pace in digital transformation initiatives. To compete in the digital economy, decision-makers face the challenge of pinpointing priority investment areas in line with consumer expectations.
From personalization to new revenue streams from integrated partner sales, several key investment areas are in the spotlight to boost airline revenues while improving the customer experience. All too often, a critical area of the customer experience is left as a backend afterthought but the place where transactions are made and closed: payments.
Payment dilemma for airlines
Airlines often find it challenging to navigate the intricacies of global payments, such as managing online payments, accepting multiple currencies, and accommodating diverse payment methods. Managing different payment networks, currencies, and regulations can be complex and time-consuming, as the industry is bound by various regulatory frameworks, data protection and privacy laws, Payment Card Industry Data Security Standard compliance, and anti-money laundering regulations. It is crucial to ensure compliance in these aspects while processing online payments. Besides these, stiff competition from OTAs and new entrants like super apps have disrupted traditional travel booking models, compelling established players to pursue payment innovations to protect their market share from erosion.
In today´s digital landscape, consumers expect payment flexibility as a key element of the shopping experience. From making payments directly from their cards or as a combination of wallet balances, reward points, and cash, or in any local currency, they expect a high degree of dynamicity from airlines to process online payments.
Payment gateways were once a solution to handle the dynamics of online payments. But today, airlines need more autonomy in providing a seamless payment experience to protect their customers' interests and deliver on their expectations. Payment gateways have authoritative control over data, user experience, and payment options but do not provide airlines with the flexibility to customize the solution on demand.
Payment orchestration is the right strategy
To mitigate the airline dilemma surrounding payment experiences, the shift from payment gateways to payment orchestration has come of age. Payment orchestration platforms facilitate secure and efficient payment transactions, enabling airlines to deliver a seamless customer experience across multiple channels. They can also be easily customized to support various payment options such as credit cards, digital wallets, and other payment methods, providing customers with flexibility and convenience when booking flights and other travel-related services.
To understand how payment orchestration provides better value for airlines, let´s take a look at how IBS Software's Payment Orchestration Platform simplifies the payment process for customers and businesses alike:
- Centralized payment management
Airlines benefit from a unified view of their entire payment landscape and can manage and monitor every facet of their payment operations, from transactions and channels to providers, through a single dashboard. The orchestration platform provides real-time payment data and performance metrics that serve as actionable insights, enabling airlines to offer their customers more relevant and winning payment options.
- Intelligent payment routing
Airlines can flexibly manage providers and channels by dynamically routing payment requests in the booking cycle to the most suitable payment provider or mechanism based on pre-defined rules and criteria. This helps airlines optimize payment acceptance rates and ultimately lower transaction costs with intelligent routing algorithms.
- Seamless payment provider integration
The ability to quickly integrate a wide range of payment providers, including major credit card networks, popular digital wallets from different countries, and emerging alternative payment methods, provides greater agility. Airlines can quickly integrate flexible and localized payment options and global options to any market without waiting for their traditional payment gateway provider to get up to speed.
- Fraud management and security
Advanced fraud detection and custom security management tools are critical in the digital landscape to safeguard against rising threats and incidents in the online payment space. With risk-based authentication and real-time transaction monitoring, airlines have better control over the end-to-end security of their payment infrastructure. This allows them to reassure passengers with safer digital experiences and win their trust.
- Payment analytics and reporting
By leveraging data-driven insights into the payment preferences, revenue performance, and spending patterns of passengers, airlines can make informed business decisions. Seamless reporting functionalities enable management to monitor key performance indicators and, in addition to optimizing payment strategies, launch targeted marketing strategies with personalized offerings that enhance customer satisfaction and loyalty.
- Scalability and flexibility
Our cloud-native platform enables airlines to scale their payment operations dynamically with their business growth. Be it higher transaction volumes or increasing providers and channels, our platform allows new providers to be onboarded seamlessly and the existing payment infrastructure scaled up without system disruptions or costly infrastructural enhancements. This flexibility also helps quickly adapt to changing market trends and customer preferences, providing airlines with a competitive edge.
Flexibility and self-service are key to quickly deploying new capabilities or integrating new partners. Thanks to resilient and robust APIs, our customers´ development teams can easily integrate and customize new payment methods and features and ensure smooth interoperability with popular payment channels, accelerating go-to-market.
Getting the digital edge
As airlines continue to modernize their retailing capabilities, we mustn´t lose sight of the end-to-end customer experience. While significant investments are made to attract consumers to airline channels and design new offers, conversion is a critical KPI to closing the loop. And payments are at the end of the funnel where transactions are made and lost.
Flexible, intuitive, and modern payment experiences are a key component of the overall customer experience and instrumental to aligning with today´s consumer expectations to boost sales conversion. Find out how our Payment Orchestration Platform can help your airline deliver a modern customer experience while efficiently managing the payment landscape complexity to gain a competitive edge in a dynamic marketplace.
Swamynathan Rajendran is a Senior Product Manager of Productized Services at IBS Software.
His passion lies in driving transformative shifts within the travel industry, with a primary focus on harnessing cutting-edge technologies and AI to elevate operational efficiency and enhance the overall passenger experience. Swamynathan envisions a seamless future for air travel, fueled by customer-centric innovation and a dedication to providing an unparalleled journey for every traveler.