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Ingenico’s Eric Liebman on payment trends in the travel industry

  • Payments in the travel industry must take into account different types and currencies.
  • On the podcast, we discuss the challenges and opportunities for travel payments.
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Ingenico’s Eric Liebman on payment trends in the travel industry

One of the themes we’ve explored on Tearsheet and here on the podcast is vertical payments. As tools become more flexible and companies and solutions providers target niche problems, we’re seeing more and more companies focus on payments as a strategic advantage.

That’s definitely happening in travel. And beyond rewards programs, the travel industry has needed to pay particular attention to payments. Global customers expect global options and providing a good payment experience can mean the difference between booking a vacation or not.

Ingenico’s head of travel Eric Liebman joins me on the podcast to talk about the travel industry’s specific needs when it comes to payments and the role payments play in a customer centric strategy.

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The following excerpts were edited for clarity.

Why travel has unique payments needs

Travel is a unique business. When you start out as a small entity, payments are like you have a terminal, someone slips a card in and you're good to go. But when you start to grow and become trans-regional, the relevance of how customers pay is something the industry hasn't really focused on yet.

If you live outside the US, you're less driven by the four colors of the rainbow that we have here in terms of credit card spend. There are over 165 different ways people pay for things around the world.

As a consumer, if your whole world of commerce revolves around a certain type of payment or currency and it's not natively available to you when you're booking travel, it's friction for you. You'll either have to use one of the four major credit cards used in the US or you'll take your business elsewhere. It's like you're saying to a customer that you don't really recognize that you have these nuances and we're not making it easy for you.

Travel as part of a customer-centric strategy

It's an evolving process. Some sectors of the travel industry are probably more advanced, particularly ones with global businesses. For local businesses, let's take a U.S. river cruise operator as an example. It has customers from all over the world, but really, it's still driven by providing a service. That's what we do in travel -- we provide a service that we try to excel at that leaves a client with a great impression of what she consumed.

If you don't extend that to the payments side of things, then you're really missing out on what I call 'the last mile'. So, whether it's online, in person, or via a call center, the experience can really be a let down if you miss the opportunity to make it relevant to customers. Ingenico and others are really trying to inculcate this culture into our industry -- that payments is a strategy and is part of a customer-centric strategy. It's a process we're going through and for the most part, I think we're still on the journey.

Competing with payments

I think payments can be a competitive advantage. Say you're going to Bali and you're booking a room and you wanted to stay local. You find a great room, but its rates are in Indonesia Rupiah. You have two choices. You can fish for a currency calculator and figure out the rates in dollars. Or, more likely, you'll go to an online travel agent to find that same property in your currency. The OTA wins and the local hotel lost a chance for a direct booking.

It's not just the optics -- customers don't like booking in foreign currency because they don't know what conversion they'll get from their credit cards. They also get charged a foreign currency fee. From a customer experience, you'll recommend the experience that's priced in your home currency. Having the foresight to price things in a user's currency and payment type makes the customer experience better and less full of friction.

Ingenico's work in travel

We have a varied and broad spectrum of companies in our portfolio. It ranges from large global airlines and hotel groups to more local tour operators like river cruises, coach and rail operators, and backpack tours. Our sweet spot is companies that are global and trans-regional. We have a global footprint and offices around the world, so we can offer support, language and payment types.

We are primarily a payment transaction company, facilitating payment transactions in and out for our customers. We advise them on regulatory changes and talk to their vendors to make sure everything is compliant. With Facebook's launch of Libra, we researched it and advised our customers on whether this was a form of payment they wanted to accept or not. Same thing when WeChat got into payments a few years ago.

Who's doing well at travel payments

As an industry, the airlines are probably ahead of everybody. They are truly global businesses and because they travel via city pairs, by design, they need to be sensitive to payment types. You can't really work in Latin America unless you accept all the local currencies and offer an installment product. Similarly, if you're going to be in China, you have to accept Alipay, WeChat Pay, and UnionPay. Airlines are the best but they still have a good way to go. There are always emerging payment types.

I would say the Online Travel Agents are probably next in line given their global reach. These guys are really beginning to create local environments for their customers. It will always be a challenge to cover global payments.

Trends in travel payments

There's some interesting stuff coming in AI. We're working with chatbots that make customer interaction eerily personal even though you're working with a machine. I think travel is perfect for this because it can be so contextual. You can text a chatbot for a hotel booking to get down to specific views by interacting with technology.

Over the last three to five years, more companies are looking at payments as part of their overall customer strategy. That's new. If you go to events in the industry, there are whole streams around payments and committees being formed. The big banks and firms like us are getting involved to create standards and improve customer experiences.

I think that as payments become more invisible, you can really book, check-in, and check-out without ever talking to a human or pulling your wallet out of your pocket. Making payments invisible has helped make the discussion around payments sexier.

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