Travel Payments

Phocuswright’s last deep dive into the payments ecosystem revealed vast differences across regions and a slow march towards tech-led solutions.

• Cards, cash, EFT dominate the payments landscape, although the mix varied widely by region
• Virtual card usage penetration was low but increasing
• Travel retailers were still resistant to supporting emerging payment methods but finance/accounting staff were more open
• Mobile payment solutions were present in name only

But the last few years have brought about rapid change. Fintech has come into its own with investors pouring money into the sector. Multiple distinct categories including payments have benefited from these investments. A pandemic driven sharp shift in consumer behavior accelerated the move towards digitalization and is transforming the landscape.

An inflection point

Consumers’ adoption of contactless payments and the decline in usage of cash has fueled frictionless payments. Mobile wallets, social commerce, NFC enabled payments have all seen significant uptake.

As new options like “buy now pay later” have supplemented traditional means of payment like debit/credit cards and bank transfers, companies are striving to keep customers satisfied while managing multiple payment types and gateways.

Cross-border transactions, merchant fees, authorization and settlement costs and fraud contribute to high costs. Legacy systems continue to dominate but travel companies recognize the need for change. Adapting to new consumer demands and adopting new technologies will be key to their future.

Research Objectives

As this complex ecosystem evolves, Phocuswright will examine where it is today, where it is headed and the trends that will impact its future.

The study is intended to be global in nature with analysis undertaken on a regional level based upon responses received.

• Map the current payments landscape and market dynamics
• Uncover pain points/key challenges
• Identify opportunities for the sector
• Detect emerging trends and technologies that will have an impact on the future of travel payments

Research Overview

Current Payment Landscape

Regional Trends

• Identify major trends across regions
• Drivers, developments and differences at a regional level 

Payment Methods

• Credit/debit cards, cash/COD, check, ETF, virtual cards, mobile, alternative and emerging payments
  • Awareness, use and trending (gaining, declining, staying  steady)
  • Costs (and implications)
  • Potential for disruption by alternative/emerging, and risk to entrenched methods

Market Dynamic and Trends

Market Dynamics

• Payment flows
• Key market drivers and inhibitors
• Analysis by Segment (Air, Lodging, Intermediaries)

Developing Trends

• Emerging payment methods
• The need for orchestration
• Innovations that impact payments
• Web 3.0
• Other trends (as uncovered by study)

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