Airlines Discuss Rebuilding the Value Proposition of Loyalty for the GenZ Generation

Airlines Discuss Rebuilding the Value Proposition of Loyalty for the GenZ Generation

What price do you put on loyalty, and how do you make that currency grow in ways that go beyond transaction? This is one of the central questions airlines have had to answer since miles and points programs were first introduced to the industry in the early 80s to ensure return flyers and reinforce brand loyalty. It proved to be a brilliant scheme, which has kept airlines afloat through hard times. But does this offering resonate with younger generations? That was one of the critical discussion topics during a special panel session at Aviation Festival, London. Matthew Hall, Head of Loyalty Planning and Management, Air Canada, Sid Krishna, Director of Loyalty and Cobrand, Spirit Airlines, Anthony Woodman, Vice President Customer Journeys and Reward, Virgin Atlantic Airways, Pekka Antila, Head of Loyalty, Finnair, Grant McCarthy, Director of Loyalty CarTrawler, and Kian Gould, Founder & Chairman, Omnevo shared their views.


“I see a lot of complexity in loyalty and loyalty programs and a great opportunity to simplify the value proposition”


Pekka Antila, Head of Loyalty, Finnair, believes there is an advantage in simplifying the loyalty program transaction. “My background in leisure travel I still look at loyalty through those eyes. I see a lot of complexity in loyalty and loyalty programs and a great opportunity to simplify the value proposition. First, by simplifying the way we communicate [value]. We could be more relevant for a large number of consumers.”

One example was the airline’s partnership with ePassi, which allows consumers to use their Finnair loyalty program points as currency at retailers around Finland. “Our members can redeem their points with close to 30,000 merchants in Finland—at restaurants, gyms, yoga schools, and cultural venues… You need to encourage your members to identify themselves and connect, but it’s so easy after that. You just choose a merchant, open your app, and redeem your points for the service that you like.”

Sid Krishna, Director of Loyalty and Cobrand, Spirit Airlines, shared how the airline made loyalty points meaningful to low-frequency, highly changeable leisure flyers by embracing digital wallets and mobile payments appealing to a new generation of “mobile humans.” “What we did with the co-branded card products we have—one of the first things we focused on—was to make sure that we had the ability for those cards to be presented in the Apple Wallet and all of those different [mobile payment options]. Because we have seen, and the data have shown, that people who end up putting their card on their digital wallet have more engagement with the program in the end. I think the push will always be there to book these folks into mobile. Also—for the millennials and Gen Z—the focus area that we’re talking about today is that they are more [active] on their mobile phones than any other system that they’ve ever been on. So that’s our best way to tap in into these folks.”

Anthony Woodman, Vice President Customer Journeys and Reward, Virgin Atlantic Airways, suggested that aligning the brand value proposition is essential to loyalty as the consumer mix changes, with younger Millennials and GenZ having different expectations of the brands they transact.


“We’re working on the seamless experience, the overall digital journey for your customers”


“One of the most critical things for younger customers mixing experience, so that is a lot of the loyalty value proposition. [We’re] working on the seamless experience, the overall digital journey for your customers…That the end-to-end experience is seamless and perfect is critical for these younger customers… The question that I always come back to is, what does your business represent? More and more, we find that customers are purpose-driven and that they want to interact with companies that have a clear value proposition—a purpose statement at heart. It’s not as simple as, ‘We have a business, we sell some stuff. We want some younger customers. Can we give them some points?’ You have to say that we are a brand committed to selling value propositions to customers. And if we don’t, then actually, let’s start there before we get too involved in the micro-loyalty economics.”

Matthew Hall, Head of Loyalty Planning and Management, Air Canada, agreed with Spirit Airline’s Krishna on the importance of a mobile-first experience and emphasized that one of GenZ consumers’ expectations is to ensure the value of their data. “We’ve got to build the mobile experience first…For Gen-Z—they are the most privacy-aware folks that I’ve ever seen. It’s not so much to say privacy. It’s more that they know what their data is worth. So to get them to give up their data will take more convincing. See, it’s less about the machine or being worried about privacy, per se, as they mature [as consumers]. It’s that they say, ‘I know what it’s worth. I want to make sure I know what my data will be useful.’ So making sure that these privacy policies are very clear versus just the long-form T&C’s.”

Hall’s comments, coupled with the insights from Antila, Woodman and Krishna, suggest that GenZ expects companies to apply their data in a way that adds value. Simplifying transactions because the offers, booking flow, and transactions are informed by the data consumers have willingly supplied. Making consumers enter information they’ve already given or switch out of a payment method they have already indicated they prefer would erode the loyalty proposition, as would pushing products or services unrelated to their consumer identity and behaviour.


“Gen Z’s are a lot less tolerant of screw-ups from airlines when it comes to technology.”


Kian Gould, Founder & Chairman of, Omnevo emphasized the importance of this, saying, “Gen Z’s are a lot less tolerant of screw-ups from airlines when it comes to technology. We all have had these experiences of going through airline checkout where you have noticeably recognized that you’re interacting with four different sites because they all look different. This is something Gen Z is very intolerant of—if it doesn’t work right. They will just stop. It is much more than an error, whereas older generations will tolerate more. This has always been one of the most critical aspects when we’re doing rollouts with airlines when it comes to the payment question. You need to accommodate much more than just the standard payment options… Someone might not have enough points to pay for half of the journey, and they want to use WeChat to pay for the rest or AliPay. So you have to support that entire Payment ecosystem, from native payments and third-party payments and cash, and Miles payments. That’s one of the most complex aspects of creating these marketplaces, but it has a huge impact on conversion.”

Grant McCarthy, Director of Loyalty CarTrawler, said the personalization of loyalty program communications is also critical to loyalty building.


“They want to say, ‘You know my lifestyle. You know I want to travel to Orlando, and I go to Disney. You’re going to offer me a car which will meet my needs…a hotel that meets my needs as well.’”


“There’s a great study by McKinsey where they’re saying the same thing. The different generations would suggest ‘extra me.’ You think about loads of programs and join one, and you stay in it forever. But Gen Z are less [tolerant of] the big rubber stamp emails—[and just booking] if it’s a pretty pointless destination [to them.] They want it to be personalized to them. They want to say, ‘You know my lifestyle. You know I want to travel to Orlando, and I go to Disney. You’re going to offer me a car which will meet my needs…a hotel that meets my needs as well.’ So you want to follow-up personalization. The broad-brush approach to people, which we have taken historically, [won’t work]. This is a new generation. So if you offer a truly personalized offering, they are more inclined to convert and spend money to help you make money. If you don’t offer a personalized solution, they are more inclined just to switch off and go to another partner, another supplier. There’s no loyalty anymore to a particular brand. If you don’t deliver what they want in a personal way, they walk and go to somebody else.”

A final thought on the brand loyalty proposition from McKinsey’s ‘True Gen’: Generation Z and its implications for companies:

“Young people have always embodied the zeitgeist of their societies, profoundly influencing trends and behaviour alike. The influence of Gen Z—the first generation of true digital natives—is now radiating outward, with the search for truth at the centre of its characteristic behaviour and consumption patterns. Technology has given young people an unprecedented degree of connectivity among themselves and with the rest of the population. That makes generational shifts more important and speeds up technological trends as well. For companies, this shift will bring both challenges and equally attractive opportunities. And remember: the first step in capturing any opportunity is being open to it.”


bu Marisa Garcia

Airlines Adopt Payment Strategies To Attract More Customers and Secure Financials Amid COVID

Airlines Adopt Payment Strategies To Attract More Customers and Secure Financials Amid COVID

During the Aviation Festival in London, an expert panel of airlines and payment services providers discussed some of the challenges of retailing and payments during the COVID pandemic. They shared their views on payment strategies to encourage more people to fly while keeping up with the industry’s financial challenges.

The experts tackled how airlines can keep up with the power shift towards customers and offer more flexibility to give consumers that “Uber experience.” In the process, they provided an overview of the current marketplace opportunities and some predictions on trends that will take hold in payments over the coming years.

“Now we’re looking forward to shaping a new way of interacting with customers at different touchpoints”


Thomas Lindner, Senior Director IT Distribution, Payment and Order Management, Lufthansa, said of adapting to new technology trends: “With the time to reassess what change of behaviour the customer will see, and demand from us, and especially as an airline supported by state aid, we had to make up our mind so we’ll be able to repay those billions in loans. Therefore, we came up with more creative ways to offer services to the customer. On the overall industry side, we had issues in acquirers having risk-aversion to that exposure with the airlines. We had a multi-acquirer strategy to juggle that, but that, of course, was a shift in the styles as well. Now we’re looking forward to shaping a new way of interacting with customers at different touchpoints.”

Frank Gubba, Product Manager Loyalty and Payments, Icelandair, agreed with Lindner on the challenges of keeping up payments during COVID. “The problem was suddenly that refunds were higher than transactions. You went out also to have good discussions with our acquirers, looking into things and how can we bring this to a turn-around. We had a financial restructuring, then, in the latter part of 2019. And we were getting everything involved in negotiations with all the key stakeholders. What helped us was to look more strongly into the reporting to understand the new normal for airline travel. It helped to be upfront and very transparent with our partners. For us, the risk mitigation part moving forward is very critical—having various providers in place and the recalibration of our mix for forms of payments. Not be so much dependent on credit and debit cards. Looking ahead, for us, to ensure like a frictionless journey, being close to the customer.”

“I will tell you—buy now, pay later, or whatever name you want to give that flexibility option was nowhere on our radar two years ago.”


Keith Wallis, Senior Director Distribution and Payments, Air Canada, suggested that many solutions were already in the marketplace though airlines were slow to adapt. “I would say the pandemic just massively accelerated everything. As being in charge of payments in Canada, I will tell you—buy now, pay later, or whatever name you want to give that flexibility option was nowhere on our radar two years ago. And it is rapidly becoming the thing that our customers are very excited about. For something like travel, which is aspirational, inspirational, and typically has a larger than average cart size, I can’t believe that buy now, pay later options weren’t already in our industry. But some vendors approach us with solutions that I don’t believe had travel on their radar two years ago.” Wallis pointed out that consumers have built a habit of online purchasing during the pandemic and have new expectations of what merchants need to offer. “I think as an industry, we need to do better. If you didn’t have one of the three major cards, you weren’t doing business with us five years ago. I’m proud to say that’s not the case now, but our customers expect even more than that. Geographically, it’s different. By customer segment, it’s different. People want flexibility and choice in a frictionless experience. We need to do much better than we’ve done historically.”

Michiel Kossen, Partnerships and Business Development in Airline, Travel & Hospitality at Adyen, said the company had helped airlines manage those high refund balances caused by the lockdown. The company is focusing on flexibility as the market reopens. “We took the opportunity to start projects that have been on the shelf for a long time. We’re expecting that there will be differences in how customers are dealing with the situation. And [we’re trying to define] how, as an ally, we can be flexible—adding new payment methods in different markets.”

Chris Fendley, Executive Vice President, Enterprise Partnerships, Mastercard, suggested the pandemic has called attention to the importance of collaboration in finding new solutions which ensure greater flexibility on payments.

“As an industry, we’re now looking and seeing real change around how passengers are dealt with, how the different partners in the industry work together, transparency of data..the whole ecosystem and managing things like access to credit, which is key”


“As an industry, we’re now looking and seeing real change around how passengers are dealt with, how the different partners in the industry work together, transparency of data…the whole ecosystem and managing things like access to credit, which is key. Also, things like customer service, where you need customer chargebacks, we all learn how painful it was when the whole system got shut down. There are legacy payment systems that are not fit for purpose. They need to evolve, and the industry needs to work together. At MasterCard, we have some solutions, but it needs to be done collaboratively with everybody.” Fendley offered some examples. “We’ve been on a bit of an education campaign on virtual cards for B2B flows. In the last 12 months, we’ve found that the agencies are looking for protection around the payment flows. Traditional VSP cash doesn’t provide the same level of protection for them or the consumer at the end of the day. I’m fully supportive of multiple solutions…But however this evolves, you need to have protection on both sides of the fence.”

In terms of B2B transactions, Air Canada’s Wallis said, agencies’ preferences in different regions affected their ability to deal with the shutdown’s financial impact.

“In North America, my experience is those travel agencies are very keen to pass through the customer’s card and allow the airline to be the merchant. They’re not interested in the fees. They’re not interested in the liability. They just want to pass that through and let us do the work. In Europe, we find that agencies are much more interested in owning that customer experience. They will take the customer’s card and be the merchant of record, assuming the costs and liability to own all aspects of that customer relationship, including the payment. I think the pandemic highlighted that many agencies who didn’t do that were very much at the mercy of travel suppliers and whatever policies we had on refunds. They were struggling to get a refund from 10 or 20 different suppliers. Those who had decided to own that aspect of the relationship were completely in control of what they could do for their customers. So, sure there’s a cost. But it’s an interesting discussion now around what is the value you can generate as an agent by owning everything, including the payment aspect.”

“..half of the millennials and all of Gen Zed, that segment is very different. Cards are not nearly as important to them.”


Wallis also pointed out that the consumer preference for credit card payments is generational. That’s true even in North America, where credit cards are widely entrenched and encouraged by points earning schemes. He advised planning for the needs of the up-and-coming consumer.

“If you look at the data in time segments—so what has happened in the last 12 months—you can see the changes in consumer segments. The bottom half of the millennials and all of Gen Zed, that segment is very different. Cards are not nearly as important to them. They pay direct when they pay online. And buy now, pay later solutions are very strong in those segments. Those are the future buyers. That’s the segment we need. I don’t need to devise new solutions for people in my age bracket—we have to understand what’s coming and be prepared for it. So it’s really about finding out not what you need to do now, what you need to start now for what [is coming up over the next five] years.”


By Marisa Garcia



Panel: How can airlines keep up with the power shift towards customers, and offer more flexibility to give that Uber experience?

Payments; World Aviation Festival

>> Watch on-demand on our website

Five key takeaways from World Aviation Festival with Mike Parkinson

Five key takeaways from World Aviation Festival with Mike Parkinson

It’s been a short while now since World Aviation Festival, which as always, was a pleasure to speak at. And even though the news of Omicron has somewhat muddied the waters for the return to normal travel, I still feel invigorated and optimistic about the future of the industry.

As a recap, I want to share with you my five biggest takeaways from the event and what I’m excited about going into 2022 and beyond.


1.The growth of Account to Account payments

By far and away the biggest payment trend in recent times is just how quickly Account to Account payments are growing. Most of us in the industry knew it was coming, but at what speed and that it was nowhere near reaching its full potential pre-pandemic.

Accelerated Digitalisation is driving the  Open Banking industry, forecasting growth to be a staggering 1079% in the UK alone between 2021-2024. This early growth in terms of users of this type of banking method is really positive to see and makes the future look very bright for Account to Account payments.


2. Build for tomorrow. Not today.

I’ve noticed a shift in thinking. Companies have started to adapt their innovation and product strategies to have more shelf-life and value for the consumer over time. Instead of trying to put out the immediate fire, or get something out as soon as possible, there’s more of a shift towards reflecting. During these uncertain times when the industry has been rocked so heavily by the pandemic, we can at least be thankful that this slowdown has allowed for more meaningful, longer-term planning. Most merchants are now shifting their thinking towards the question “What does 2023/24 look like? How can I build for that consumer?”


3. Airlines are becoming more consumer-focused.

The modern customer, predominantly Gen Z or millennial, demands an effortless digital experience and more flexibility. During the pandemic, refunds became a huge bone of contention for them. It became clear that the flexibility that they expected wasn’t really there. Cash settlement speeds and the handling of refunds / chargebacks were ranked as the top two challenges faced by companies in 2020 during the height of COVID-19 and they’re actively looking for ways to alleviate these pain points to help win consumer loyalty.

4. Lower costs and faster settlements.

All of this adaptation needed by the Airline industry is leading to some good upsides in the long run. For example, those who are looking to implement faster cash settlements and improve transaction operations are not only just left with happier customers. Those who are offering Trustly’s unique collection method are skipping out on the middlemen, meaning a much lower cost of distribution.


5. Bank on the right proposition

For the last five years, Trustly has been focusing on shaping a relevant Global Bank proposition with its distributing partners for the industry. Throughout this time we’ve built up a solid idea of what works, what doesn’t and what is missing. In my opinion, the way forward is through banks that provide automation, guarantees, real-time messaging, reconciliation and instant settlement, all delivered through proven industry specialist partnerships.

Want to read more? Get our full report on the future of travel here.

Thanks for reading.

Mike Parkinson | Director of Travel @ Trustly

The lessons learned from providing payment orchestration for airlines

The lessons learned from providing payment orchestration for airlines

International airlines have, by necessity, some of the most complex payment ecosystems of modern merchants, and an equally diverse (and thus demanding) customer base to match. The COVID-19 pandemic led to unprecedented levels of stress being placed on systems which, in many cases, were already outdated to begin with, highlighting the need for innovation and automation throughout the payments process.

CellPointDigital CEO Kristian Gjerding, explores the myriad challenges faced by airlines in the wake of the pandemic – both within and outside of the payments space – and how merchants in all verticals can leverage these learnings to make payments easier for their customers.

An industry understandably concerned with security

Fundamentally, the airline sector is justifiably risk averse when it comes to every aspect of its business. External threats to security, technology malfunctions and simple human error can, in the worst-case scenario, lead to loss of life, leading most airlines to favour tried and tested systems in place of new initiatives. Furthermore from a commercial perspective, airlines on the whole have high overheads, and operate at such low margins, that making any changes to their existing systems could significantly damage – or improve – their bottom line.

The high-risk nature of change leads to a reluctance to embrace new technologies, which is perfectly epitomised by the flagship model, the Boeing 737, which, despite taking its first flight over 50 years ago, is still widely used throughout the industry today, even though there are far more efficient models available on the market. This culture of risk aversion extends to airlines’ payment ecosystems, with many carriers preferring to persevere with traditional and cumbersome payment solutions, or sub-optimal partnerships with a single PSP, rather than embracing the benefits of new, emergent platforms and solutions.

A complex payment eco-system in a complex market

By definition, international airlines serve customers from all over the world, operating in multiple different currencies and jurisdictions. This leads to many nuanced challenges in allowing customers to pay how they want; different cultures prefer different methods, with some regions preferring digital options over physical cash, for example. Currency barriers can also create friction during the shopping and payment experience, leading to failed conversions. Additionally, consumers have many different profiles, from business travelers to families on long-haul leisure breaks, each with their own unique payment needs.

As a result, airlines need to offer a wide variety of payment methods around the world, managing a high volume of cross border transactions and offering multiple different currencies to match their consumers’ needs. The complexity, however, isn’t just on the customer’s side. Managing a payments ecosystem that can successfully meet the needs of an international customer base means building relationships with several different acquirers and PSPs in every territory the airline serves, giving them multiple options to mitigate risk and optimise their costs and acceptance rates.

Given the cumbersome process of establishing and integrating new acquirers, payment method providers or PSPs, airlines often encounter difficulties in rolling out the right payment eco-system they need for their network, or scaling platforms to support a new destination. This leads to friction for customers looking to buy, change or refund their tickets.

COVID-19; a catalyst for digital adoption & automation

These challenges for airlines and their consumers were brought to bear during the COVID-19 pandemic, which placed unprecedented stress on airlines’ traditional payment systems. As consumers on a global scale tried to refund tickets in the event of mass flight cancellations, airlines had to be on hand with alternative options to keep capital in house, largely by offering rescheduled dates and issuing vouchers wherever possible. At a time when refund requests hit their peak, the need for and benefits of automated solutions to offer and issue refund vouchers as an alternative became self-evident.

Mass ticket cancellations also led to a near overwhelming amount of chargeback requests which, again, many airlines didn’t have the technology in place to manage efficiently. Carriers that didn’t have the capability to automate the management of unjustified disputes had to either incur sizable costs to increase their back-end resources to handle the volume, or simply write revenue off altogether, leading to significant negative financial impact in both scenarios.

Society’s wider shift towards digital and contactless payment methods was also accelerated during the pandemic, with customers increasingly demanding socially distanced, COVID-secure payment methods, and airlines who readily embraced this change saw the benefits. One example of this is Cellpoint Digital client, Southwest Airlines, which incorporated Apple Pay into its payment mix in late 2019. The platform has since become their most popular alternative payment method in the wake of the pandemic and continues to grow month-on-month.

What the pandemic highlighted overall was the rigidity and lack of automation of most airlines’ current payment solutions, and the need for more agile payment orchestration solutions to better serve their customers and optimise their payment ecosystems on a global scale.

A new dawn for the airline sector?

For an industry that was already averse to risk, and faced challenges in innovation and technological development, COVID has spearheaded digital adoption and exposed the need for more efficient payment systems. The changes brought about by the pandemic will be felt for years to come, and airlines will need to adapt to survive. Like airlines, the merchants who embrace the widespread shift to new technologies such as payment orchestration, and invest in allowing their customers to pay how they want, will see the greatest benefits in the digital-native future.



The travel industry has a payments problem. It’s time to fix it.

The travel industry has a payments problem. It’s time to fix it.

The financial impact of the COVID-19 pandemic has been huge for the travel industry. Finding a new way to work with its acquirers is going to be critical as we look to recovery.

The travel sector and the payments industry have never had a simple working relationship. There are several examples of travel industry failures, such as the collapse of Thomas Cook and Monarch Airlines, that have concluded with the travel operator and their payments partner accusing the other of being the source of the failure. This happens when the acquirer withholds funds to cover the cost of the chargebacks it will be liable to repay customers if the operator goes out of business. Taking this precaution is of course understandable, but it is the view of the travel business that this withholding of cashflow at a critical time creates enormous pressure for them and in fact is final straw that triggers the very collapse that the acquirer is seeking to protect itself against.

And of course, the pandemic has brought that strain in the relationship into even sharper focus. Global travel and tourism lost almost $4.5 trillion in 2020. For context, while worldwide gross domestic product contracted 3.7 percent, travel’s contribution to the global economy reduced by 49.1 percent.

And it hasn’t only been only financial challenges that the travel sector has suffered since the outbreak of COVID-19; there have been operational issues to face as well, as they were forced to process many millions of reservation cancellations. To make matters worse, some acquirers reacted to the adverse market conditions by either exiting the sector altogether, or resetting the terms of business with their travel clients. This has put even more pressure on the relationship between the two parties in a situation where the travel business has options because fewer payments partners that will work with them.

The heart of the issue: future delivery payments are high risk

Much of the friction that can occur between the travel sector and acquirers stems from the fact that travel is considered a high risk vertical by the payments industry, and this was true well before the pandemic. This is true of all sectors where long periods of time occur between the consumer’s payment and the date that they receive the goods or services. In the travel industry this period is typically 60-90 days.

If the goods or services are not delivered for any reason, be it cancellation, unforeseen circumstances such as COVID-19, or the business ceasing to trade, it is the acquirer who is liable for repaying the customer. When the high transaction values typically seen in travel are factored into the equation, acquirers can find themselves exposed to tens of millions of pounds worth of risk for a single travel business. Many simply do not have the appetite for that level of risk.

A new solution: safeguarding addresses the issues created by holdbacks

As we have already discussed, risk is usually managed by the acquirer through withholding cash as collateral. But there are several drawbacks that makes this a sub-optimal solution for the travel sector. The drain on liquidity is an obvious one, but in addition it is often unpredictable how much acquirers will withhold to offset the fluctuating risk, and that makes decision-making and forecasting extremely difficult. Withheld funds also cannot be shown on a company’s balance sheet.

So it will come as no surprise that travel sector is trying to find a new way of working with acquirers as they strategize recovery and growth beyond the pandemic. And progressive payments companies including Paysafe are also looking for new solutions to work more harmoniously with the sector, specifically replacing cash collateral with a trust-based mechanism called safeguarding.

With safeguarding, the travel business still lodges a cash reserve with a third party. But instead of being repaid in large sums often at the acquirer’s discretion, the funds are released steadily on a planned basis either when or shortly before travel takes place.

This new way of working addresses both the liquidity and transparency issues the travel industry has consistently voiced its concerns about. Funds held in trust can also remain on the company’s balance sheet.

Working towards a better future

Cash collateral was the go-to solution for managing acquirers’ risk exposure in the travel sector for years. But this system is no longer fit for purpose. Safeguarding will soon become the most common mitigation process for travel merchants and acquirers. It will enable airlines and the rest of the travel industry to avoid tying up critical funds that would be better spent on running and expanding great businesses, as well as attracting investment through making balance sheets healthier.

Paysafe’s latest whitepaper Safeguarding the future of travel: Why its time to rethink payments and liquidity in the travel industry is available to download now.

How Fintech will Drive the Travel Industry’s Recovery

How Fintech will Drive the Travel Industry’s Recovery

The pandemic challenged leisure travelers and travel brands in a way few events have done before. It was during this time that travel anxiety surged and revenue plummeted, highlighting the
need for flexibility and assurance on both sides. Travelers are prioritizing the ability to change their minds or their plans; in fact, 43% of Hopper users ranked flexibility, or the ability to change plans without penalty, as the most important factor when booking a trip. But airlines and travel companies? They are searching for a solution that increases margins, decreases risk and drives conversion. Developed in 2018, Hopper’s fintech suite of products are doing just that. From disruption protection services to products that generate revenue before the customer even books, financial technology has the potential to drive substantial gains across the industry.

The Role of Fintech in Travel

Traditionally, revenue streams in travel consist of accommodations, airfare, tours, cruises and cars, and efforts to add new monetization models through added fees and services have often seen push back from customers. An alternative approach is to create a brand new sector of the travel industry – a fintech sector, that is AI-driven and dynamically priced. Fintech ancillaries and prediction technology allow travel brands to monetize the exact flexible options that customers are looking for.

Hopper is leading the way in bringing this technology to market. First deployed in the Hopper app, the company’s fintech products include Price Freeze, which allows customers to freeze prices for up to 14 days, to Change for Any Reason, which gives customers the ability to instantly change the date, time, and even airline of the flight for any reason up to 24 hours prior to departure. As a result of the pandemic, travelers are more keenly aware of the risks that come with booking travel, and solutions to this stress are increasingly valuable. According to Hopper, almost 60% of customers purchase at least one fintech product when making a booking and on average travelers are willing to spend 15% more upfront on their tickets for flexible options. And travelers can’t get enough, as 79% of fintech users will repeat their purchase. The product market fit is clear – this fintech increased Hopper’s revenue 100% year-over-year despite the pandemic, and today 50% of the company’s revenue comes from these fintech products alone.

Driving Travel’s Recovery

Hopper is not a standalone use case – fintech margins have significant potential for the entire travel industry. If all travel distribution channels (airlines, hotel, banks, GDS, OTA, Metas, etc.) offered fintech products based on dynamic pricing, it could increase the total consumer spend for the sector by billions. According to some estimates, this could be as high as $200 billion annually. And while travel brands look to increase bookings as travel resurges, some brands are also looking to get a piece of this new pie.

The key to fintech success in the travel industry is speed, relying on the cloud for scalability over the next year will help companies start to see their share of this new revenue stream. This is what led Hopper to announce Hopper Cloud, the company’s B2B initiative that enables any travel company to easily scale fintech with pre-built integrations. Further, Hopper takes on all the financial risk so companies never need to worry about cash flow impacts of market disruptions or negotiating reinsurance to keep the balance sheet. But that’s not all – in addition to the fintech products, Hopper Cloud also allows customers to seamlessly tap into the world’s largest multi-sourced travel marketplace. In just a few clicks, travel companies can stand up a world-class travel agency, or can elevate and expand an existing travel company by seamlessly adding new categories.

Meeting New Traveler Expectations

Consumer behavior has changed and the added stress around purchasing airfare in the past year shines light on the need for in-depth and tailored fintech offerings. Furthermore, flexible payment options, like buy-now-pay-later that have become common in the retail industry, have set higher expectations for the level of control customers want while purchasing all goods and services online. As such, fintech should be considered a must-have for travel brands that want to remain competitive in the modern market.

As the industry rebounds after a detrimental year, new emerging technologies will define the modern travel experience that customers now expect. If brands are able to serve these needs while also creating opportunities for incremental spend, there is the potential of industry growth worth billions of dollars. Fintech is uniquely positioned to both redefine the traveler’s journey and significantly aid in the industry’s recovery, just when brands need it most.

By: Ben Walters

How Buy Now, Pay Later Grows RASM and Reduces Reliance on Fare Discounts

How Buy Now, Pay Later Grows RASM and Reduces Reliance on Fare Discounts

Sipping a citrusy umbrella drink with your toes toying in sugar-white sands. Far from the big city, summiting a remote jungle mountaintop with your two best friends from childhood. The only thing standing in the way of satiating this social media-fueled wanderlust? Travel costs.

Traditionally, airlines relied on discounting to lure hesitant customers. Potential travelers might keep an eye on prices, waiting to book until the very last minute—or even worse, not book at all. But now, the booming Buy Now, Pay Later (BNPL) trend – expected to grow 10-15x its current volume, topping $1T in annual gross volume by 2025 – has ventured into the travel industry, giving airline revenue managers a shot at expanding Revenue Per Available Seat Mile (RASM) in ways they never knew were possible. The new payment method allows customers to start packing for trips that were once only a pipedream. The payment method is not only fulfilling vacation fantasies, but it’s increasing incremental bookings and average order values for airlines.

Uplift is the leading BNPL provider overcoming price as a barrier for booking travel. Instead of paying the full cost upfront, airlines are partnering with Uplift so travelers can spread the cost of their trip over fixed, monthly payments spanning a three to 24-month term. With BNPL, vacation experiences are now more accessible for travelers, with 39% of Uplift travelers reporting they would not have booked their trip without Uplift at checkout. Whether they’re looking to snag a slice of paradise or longing for a warm welcome home, travelers are booking trips they might have otherwise skipped.

How bite-sized payment plans are the antidote to price discounting


  • Boost your average order value: With more payment options on the table, travelers are more willing to pull the trigger on upgraded seating, non-air bundles, and in-flight bonuses. Airlines using BNPL report a 40% increase in AOV.
  • Grow RASM faster by simultaneously increasing yield and demand: When you can drive an increase in bookings without dropping the price, you can maintain price structures for longer time periods. This generates a higher yield via increased average order values while also increasing Load Factors through incremental bookings.
  • Increase unit profitability: Uplift’s exclusive relationship with UATP provides a lower interchange rate when compared with standard credit card interchange.
  • Infuse your revenue management strategy with a targeted non-price lever: Buy Now, Pay Later models add a new variable to the revenue management toolkit, opening new doors on targeted interest-free promotions that virtually eliminate the need for discounting.

With a Buy Now, Pay Later option at checkout, Uplift helps overcome a customer’s indecision to book based on price. Travelers are also more likely to secure additional trip upgrades, increasing wallet share for your airline. With BNPL, you’re able to acquire new customers without discounting ticket prices. Social media has done the legwork of igniting a historically unrivaled thirst for travel. Has your airline adopted the latest payment strategies that are winning over these eager customers?

A Brief State of Affairs: Airline Payments 2021

A Brief State of Affairs: Airline Payments 2021

It’s now nearly 1.5. years since the pandemic started and the recovery is slowly but surely happening. From a payments perspective, the impact has been clearly visible and it’s now time to focus on how payments can contribute to more streamlined operations, a ramp up in sales and a return of customer confidence. During the World Aviation Festival in December, a 2 day payment track with be part of the agenda. Some of the topics that we’ll discuss in London are introduced in this blog, providing a quick look of where we stand today and what to expect in the near future.

Let’s get started with some of this year’s buzz words..


BNPL – Buy Now Pay Later


Before COVID made leisure customers reconsider their payment options, airlines were already exploring ways to provide credit and compete with Tour Operators / Package Providers on payment acceptance. The idea was that allowing customers to lock in special offers and to pay later would push more traffic towards their direct channel. Stepping away from a full prepayment at the time of booking and allowing customers to pay either later or in installments has therefore become an important part of an airline’s payment strategy. What are the options/flavors available and under review?

  • Time to Think; hold the booking for e.g. 10 days for a small fee
  • Credit Card; charge or revolving, the customer is charged by the issuer after the booking. The airline is paid directly / as contractually agreed with their acquirer
  • Credit Card instalments; have been popular in Latin America for many years. The airline is either paid fully at the time of booking or in installments over x number of months
  • BNPL; instant credit, customer pays over time. Full payment by the BNPL provider to the airline at the time of booking, liability for non-payment by the customer is with the provider, as is credit and fraud risk. The airline is paid by:
    • Bank transfer
    • VCN (Virtual Card Number)
    • UATP / IATA clearing
  • PWYF (Pay When You Fly); the booking is held till the day of departure and payment is made at check in
  • Lay away; the payment to the airline is spread over the time between the booking and departure. The price is locked in and ticket is issued once the booking amount is fully paid

Obviously all the above options come with their pros and cons and operational challenges. A holistic approach, involving all the relevant stakeholders on the airline side will therefore be key when deciding which one(s) to implement.


Open Banking Payments


Where BNPL offers a direct incentive (”pay later”) to customers that drives adoption, that is not so clear when it comes to Open Banking Payments, another buzz word. IATA recently (finally) announced the IATA Pay pilot with Emirates whilst other fintech providers have been rolling out API based solutions over the last couple of years.

Much has been written about the upsides for Airlines when offering Open Banking to their customers and successfully cannibalizing the share of wallet of credit cards, in summary:

  • Different pricing model, resulting in a significant reduction in processing costs
  • Non reversible (for fraud or other reasons), creating a saving in operational and chargeback related costs
  • Grow (online) sales, reaching customers that prefer to pay directly from their bank account
  • No deposit or hold back requirements for covering the time between booking and departure
  • In case of Instant Payments, improved cash flow

Without a doubt, even or especially post pandemic, all very strong points from an Airline perspective but it’s all theory if customers do not select and successfully check out with Open Banking, especially the ones now paying by (corporate) credit card. So it’s all about adoption, what will play a role from a customer perspective?

  • Cash flow, money leaving the customer’s account instantly is not a selling point! As mentioned above, recently there’s a trend towards BNPL (delayed or installment payments), Open Banking is heading in the opposite direction
  • Dispute rights, the massive number of COVID related flight cancellations and the operational issues around refunds last year have further fueled concerns about non reversible payment methods for Airline direct bookings that are not covered by consumer protection schemes. Should airlines consider bundling Open Banking with travel insurance that will cover non delivery of service?
  • Stickiness, card issuers offer their card holders all kind of perks (think about the miles earned on the airlines’ own co-branded cards) and services like travel insurance and cash-backs. Currently these loyalty schemes do not exist (yet) for Open Banking and linking it to the airlines FFP will also introduce costs
  • Spending limit, unlike most cards the spending limit for Open Banking is typically directly related to your account balance, which might make it easier to pay from your bank account (also if you’d like to keep your spending limit for payments once arrived at the destination)

Main question that remains is how to incentivize Open Banking and drive adoption? It is quite likely that adding the above mentioned missing features will put Open Banking in the same league cost-wise as the credit cards it so eagerly wants to replace.




The latest buzz word in Travel is Fintech. Players in the travel booking and payment value chain are constantly looking into expanding their offering into margin rich areas, remove friction and/or stretch their role / control. PSS’s, GDS’s, OTA’s, IBE’s, NDC aggregators, Virtual Interlining Providers, Meta Search providers, they’re all now actively involved in the payment process (either voluntarily or forced by regulations like Strong Customer Authentication).

Fintech is however more than payments and payment related services, according to Investopedia: “Fintech is used to describe new tech that seeks to improve and automate the delivery and use of financial services. ​​​At its core, fintech is utilized to help companies, business owners and consumers better manage their financial operations, processes, and lives by utilizing specialized software and algorithms that are used on computers and, increasingly, smartphones.”

Join us on December 1-2 in London to learn about the latest developments and discuss airline payments and fintech related topics with subject matter experts from across the value chain!


Well connected, experienced Payment Professional with a long track record of enabling multi channel payment solutions for merchants in the Airline & Travel sector around the globe. Thorough understanding of the complex processes that drive payments across the different distribution channels. Regular speaker at industry events, webinars and workshops. External IATA Instructor for the “Airline Payment: from Cards to Blockchain” course.

Contactless & Discoverability: How people operate, work in, and experience airports

Contactless & Discoverability: How people operate, work in, and experience airports

As a trusted solutions provider for leading aviation companies, the LocusLabs team keeps a close eye on how the pandemic impacts every facet of the travel experience. Below, I share my thoughts on two profound changes taking place in the aviation industry and what they imply about the future of travel.

Contactless Takes on A New Meaning

Contactless isn’t exactly a new concept. An established and well-understood paradigm in the payments space long before the pandemic, technologies like Near-Field Communication (NFC) gave us the ability to check out at the grocery store by hovering our smartphones over a small point of sale device. No wallets or cash required. Introducing contactless technology to the payments space was primarily a matter of convenience.

However, as the pandemic spread across the world, contactless became a necessity. Health concerns made it critical for airports and airlines to find new ways of safely facilitating routine air travel experiences like dining, shopping, checking in bags, boarding, and deplaning.

Many of our customers and their passengers focused on reducing surface points of contact. One creative application relied on established, familiar technology – QR codes – to create contactless interactions between passengers and airport signage.

Airports worldwide began incorporating QR codes on digital and paper signage, allowing passengers to display interactive versions of maps or concessions menus right on their smartphones – without having to touch anything.

Airlines seamlessly integrated information about amenities and safety protocols from destination airports directly into their native smartphone apps, giving passengers peace of mind and allowing them to discover and explore the airport before settling at their departure gate.

TL;DR: Contactless experiences will remain a high priority beyond the pandemic.

Making the Built Space more Discoverable

Airports aren’t just a means to an end – they’re rich with opportunities for travelers to discover local culture, food, businesses, and people. Managing such involved, high-traffic, complex spaces present a unique set of challenges. By making built spaces more discoverable and easier to navigate, we have the potential to reshape how people operate, work in, and experience airports.

For passengers, feeling confident and informed is empowering. Direct access to critical knowledge makes traveling easier and more enjoyable. Reliable, real-time information allows travelers to explore the airport without worrying about getting lost or wandering too far from their boarding gate. This discovery mindset translates directly into increased revenue opportunities for airports and airlines.

TL;DR: Going forward, consumers will demand better access, visibility, and information about the spaces they occupy.

What’s our role? At LocusLabs, we’re breathing life into once-static directories with dynamic, contextual search and harnessing spatial data to increase revenue by encouraging exploration and concession discovery. For staff and leadership – the people responsible for building appealing, engaging airport experiences – LocusMaps on Digital Display ensures travelers can find and enjoy everything the airport teams work so hard creating.

LocusMaps on Digital Display aims to drive concessions revenue by activating every screen in the airport terminal with dynamic, location-relevant information that prompts travelers to explore the entertainment, dining, and shopping outlets surrounding them. The product comes with the added ability to include QR codes that enable a seamless transfer from the display to a user’s mobile device. Not only does this feature create an interactive, touchless experience, but it also makes inroads to a much more valuable digital channel – mobile!

This new product addresses two critical challenges facing the aviation industry today: increasing contactless experiences and improving airport discoverability. LocusMaps on Digital Display illustrates our approach to supporting airport and airline customers by helping them increase revenue and exceed passenger expectations, even during periods of global transition and unprecedented industry stress.




The biggest pain points in air travel and how to (finally) address them

The biggest pain points in air travel and how to (finally) address them

Lufthansa Innovation Hub analyzed 15,000+ airline reviews on TripAdvisor with NLP for an objective analysis on how to fix the air-travel experience. 

By Dan Ly, Junior Research & Intelligence Analyst at Lufthansa Innovation Hub.

This article was originally published on



Consumer confidence in air travel has been shattered dramatically in recent months. The ongoing pandemic has produced far-reaching consequences, including travel bans, flight restrictions, and the perceived danger of infection in airports and planes despite a lack of evidence. Unsurprisingly, travelers are hesitant to book their next plane ticket as they continue to feel anxiety and confusion about what keeps them safe.

Additionally, millions of travelers have had trouble getting a refund for their canceled flights. In April alone, the US Department of Transportation saw a +1546% y-o-y increase in complaints related to US airlines’ customer service—88% of these complaints concerned refunds.

It’s probably fair to say that consumer confidence in the travel industry might be at an all-time low right now.

That begs the question: how can we restore consumer confidence?

The focus of airlines and travel providers should obviously be on fixing refund and cancellation processes. But most importantly, they need to adopt COVID-specific safety procedures. Health and hygiene protocols must be implemented quickly, as creating a safer travel experience is of paramount importance to rebuild trust for the entire industry.

But there is A LOT more!

Making air travel great again

The future of the (air) travel industry will depend on more than just addressing travelers’ safety concerns. As McKinsey recently concluded: “the romance that travel used to inspire was already wearing thin even before the crisis.” And we agree—customer satisfaction appears to have suffered over the past decade.

The Atlantic proposes an interesting theory regarding the source of this growing frustration with airlines. They argue that flying has devolved from a relatively pleasant experience to a barely tolerable hassle in recent years due to the entrance of low-cost carriers. With them, the industry became heavily focused on cutting costs and stripping away goodies that flyers long associated with a comfortable travel experience, such as legroom, food quality, and complimentary baggage drop-off. Once taken for granted, these perks must now be paid for or done without, especially when traveling with a low-cost carrier.

Survey data confirms that many travelers felt stressed during their trip, even before the COVID crisis. And it’s not just the plane ride itself, but the unpleasant process before and after boarding, starting with navigating the airport. It’s no wonder that travelers would appreciate improvement on an already frustrating experience that the pandemic worsened and exposed.

Airlines and other travel companies shouldn’t only meet the bare minimum by reassuring customers. They need to excite and attract them. Leaders should focus on making travel better, not just safer. We need to listen to travelers’ complaints as well as build on the aspects travelers most appreciate.

The big question is how?

An unconventional approach to sourcing and analyzing customer feedback

 To identify the most relevant and impactful measures for fixing today’s air travel experience, we wanted to find an objective, data-driven way to identify the major pain and gain points for travelers. Then, we wanted to find out how to strategically approach them. So, we developed a quantitative view on the aspects of the customer journey that need to be fixed most urgently, as well as the ways airlines should prioritize these topics through a strategic roadmap for improving the post-Covid air-travel experience.

In order to find travelers’ biggest frustrations with today’s state of air travel, we applied an unconventional approach that goes beyond typical consumer surveys. We turned to TripAdvisor—the world’s leading travel-review site.

On TripAdvisor, we scraped more than 15,000 reviews of 12 major airlines to get an industry-wide perspective on how travelers review their travel experiences. The selected airlines are mostly Western airlines (with the exception of Singapore Airlines) to adjust for language bias as we only looked at English reviews. The data was sampled for 2019 to phase out the COVID-19 impact, which would skew the data to customer service and refund issues.

We then analyzed the data with the help of a Natural Language Processing (NPL) tool called Quid Netbase that uses an AI-based algorithm to inspect the reviews for their content and themes to place each review into relevant categories, e.g. Food & Beverages, Onboard Services, Flight Irregularities.

How to measure pain and gain points

To objectively determine the most relevant pain and gain points, we defined two dimensions to help us gauge consumer reviews: relevance and sentiment.

Relevance counts how many mentions a specific topic has in order to measure its importance. The underlying assumption for this metric is that the more people talk about a given topic, the more relevant the matter.

Sentiment is the underlying tone of the review, which can be positive, neutral, or negative. The sentiment is used to define whether a given TripAdvisor review was mentioned with a negative tonality, which would categorize it as a potential pain point (“The flight was delayed for hours”) or in a positive light, characterizing the respective review as a gain point (“I really like the food on my flight”).

So, let’s take a look at what we discovered.

Results 1/2: What do customers bring up the most?

First, we looked at the topics travelers mentioned the most in their TripAdvisor reviews. Based on the number of reviews (relevance), it becomes immediately apparent that customers feel strongly about Flight Irregularities and want these to be addressed. The reviews were written pre-Covid so this theme was already highly relevant before the onslaught of flight cancellations following the outbreak. Flight Irregularities surpass other topic clusters by a mile—20% of the 15,000 reviews bring up the issue and express the need for travelers to be taken care of when something goes wrong, e.g. after missing a connecting flight due to a delay in the preceding flight.

Here is the complete overview of the 16 most talked about topic clusters by air travelers:

Food & Beverages and Onboard Services were the second and third most relevant topics—with 15% and 13% of all reviews, respectively. This confirms that travelers don’t just expect airlines to transport them from A to B but also to deliver hospitable and friendly services during the flight (“crew performance” also featured strongly as an important factor in both clusters).

Surprisingly, monetary value was one of the least discussed topics in our review sample, going against the conventional wisdom that price is usually a major influencer when booking a flight. However, this seems to take a backseat when travelers evaluate an experience in hindsight.

Beyond these four categories, we also see standard topics for the airline industry, such as Seat Comfort, Carry-on Luggage, and Boarding. It’s worth mentioning that Punctuality (arrival and departure times) is discussed less often than Hospitality and Comfort, suggesting that travelers are willing to accept delays if they have a pleasant and friendly experience on board.

From a digital innovation perspective, Digital Accessories and Onboard Entertainment were also relatively dominant topics (together comprising 9% of all reviews) while Boarding and Check-in – usually considered major moments of frustration – were less prominent (5% combined).

Last but not least, “Seamless Travel Experience” seems to be gaining traction as travelers adopt the phrase, which was originally coined by industry professionals to describe the fluent, connected traveler journey. This concept was one of the most frequently mentioned topics, emerging as a separate cluster identified by our NLP tool.

Results 2/2: Identifying the biggest pain & gain points

Now that we know the most relevant topics, we need to identify the underlying sentiment of each review to understand which topics travelers consider pain points and gain points.

In the graph below, we ranked the major topic clusters according to whether they contain more positive reviews (labeled as a gain point) or more negative reviews (representing a pain point).

Flight Irregularities clearly dominate the pain-points ranking. The number of negative mentions highly exceeds the number of positive topics among the major gain points (see graphic). Not only does this suggest that Flight Irregularities provide the biggest bottleneck in the overall customer experience, but also that they outweigh any positive experiences. Airlines should therefore prioritize preventing Flight Irregularities to avoid a devastating impact on customer satisfaction and gain a competitive advantage in the industry.

By contrast, no single positive point stands out from the crowd. Instead, the best experience seems to be delivered as a combination on several fronts. However, hospitality factors like Onboard Services, Food & Beverages, and Seat Comfort reinforce what we found earlier—namely that a great hospitality offering really makes a difference in customer satisfaction.

The strategic roadmap for a better customer experience

Although the above pain and gain points clarify which areas need attention, airlines and travel providers must ask: Where do we start in improving the travel experience?

As a guiding framework, we propose a Customer Satisfaction Framework that we coined the “Relevance-Satisfaction Matrix.” The matrix pinpoints the urgency of the different parts of the flight experience and thereby helps airlines to prioritize topics.

The Relevance-Satisfaction Matrix

The Relevance-Satisfaction Matrix is split into four quadrants each suggesting a needed action step: Match, Surpass, Optimize, and Solve. By assigning each aspect of the flight experience to one of these categories, airlines can decide their customers’ most pressing needs and must-haves, as well as nice-to-haves that can be turned into competitive advantages.

The upper two quadrants represent gain points; the lower two contain pain points. The right half of the matrix indicates “must-haves”—topics thatare highly relevant to customers. The left side of the matrix characterizes “nice-to-haves”—subjects that are less relevant to customers.

The matrix suggests that airlines should consider two factors to decide which part of the flight experience to tackle first—customer priority and current satisfaction level. We measure the current satisfaction level by subtracting the number of negative reviews from the number of positive reviews.

Each of the four quadrants offers different implications for travel providers.

  • “Match” represents categories with positive satisfaction scores. However, they are less critical for the flying experience – as they are mentioned less frequently by travelers – making them nice-to-haves. Companies may refer to these as a point of differentiation rather than a necessity.
  • “Surpass” comprises “gain point” categories that are important to the customer. Overall satisfaction is positive for these topics, which sets a certain standard that airlines need to surpass or be regarded as subpar.
  • “Solve” constitutes important services for customer satisfaction that airlines have failed to deliver. They should be the top priority for airlines that want to set themselves apart from the competition.
  • Lastly, “Optimize” describes “pain point” categories that are less critical to customers (they are brought up less frequently). Customers want to see improvements in these areas but are likely to be more lenient. If delivered, they carry the potential to become standout services as they provoke the highest negative sentiment among current consumers.

The action plan: How to translate customer reviews into action

Now, let’s plot the pain and gain points for the airline industry based on the Relevance-Satisfaction Matrix and our TripAdvisor analysis of airline reviews.

This will help us define concrete actions and development plans for airlines to ultimately offer a better customer experience.

As a reminder, we analyzed 12 airlines, so the map reflects traveler satisfaction with the whole air travel industry, not an individual airline. This also means it reflects the perceived ‘standard’ in the industry for each flight experience cluster. Based on the insights from the matrix, we dug deeper into the individual reviews to try and find emerging themes and trends.

Here is the mapping for airline reviews in one chart:

While the matrix offers many insights, we summarized the most notable takeaways:

1)    Airlines need to (finally) fix the basics: Flight Irregularities

Flight Irregularities are the number one most critical pain point for customers. The message is clear— travelers want them to disappear. Of course, airlines are not always in control of these delays. Nonetheless, the reviews confirm that airlines can drastically improve customer satisfaction in this area through simple and small changes. More on exact solutions below.

The far-right position in the matrix also indicates a disproportionate significance to customers compared to other clusters. As such, the way airlines treat their customers and handle situations in the event of delays or cancellations will overshadow impressions from other clusters.

So, what specific steps can airlines take to address this pain point? By carefully analyzing each specific review with the help of Quid’s AI, we found that most complaints concern the lack of timely communication surrounding delays and cancellations, as well as the lengthy rebooking and replanning process—some of the specific issues mentioned include long waiting times, unhelpful staff, lack of information, and transparency. Therefore, transparent communication and a user-friendly Flight Irregularities Management System may help to address this pain point and potentially even convert customers from competitors.

Many reviews also showed a preference for travelers to ‘handle it directly’ and ‘by themselves’. With automated processes and digital self-service solutions such as chatbots, airlines can offer more control and flexibility to their customers.

We do realize the proposed solution is only feasible for digitally native travelers. However, moving a proportion of distressed customers online will relieve the pressure for ground staff and enable them to focus on helping the non-digitally native customers with more efficiency.

2)    Taste is the epicenter of pain for airline meals but variety offers a solution

In the “Surpass” category (high relevance and positive sentiment), Food and Beverages (F&B) makes an interesting case. The matrix tells us that travelers don’t think airplane food is as bad as we might expect, given experimental studies that show how low air pressure and white noise repress our taste buds (here and here). As it turns out, taste is not the only important factor for satisfaction with F&B. The variety of choice can be a game changer.

We found that while taste was a major pain point and the main driver of negative reviews, variety of choice seemed to act as a compensator. Many reviews praised the consideration for dietary preferences such as vegetarian, vegan, and gluten-free dining.

So what to take away? Since taste is particularly difficult to implement due to factors like low margins and limited storage, airlines should instead focus on diversifying their menu with more dietary options. Digital means could streamline the process, enabling customers to choose their meals online or in-app, helping airlines optimize supply.

3)    Bring-your-own-device coupled with in-flight entertainment

Entertainment & Digital Accessories belong to the “Match” quadrant with the majority of discussed topics. Reviews are mainly positive, though most travelers think of these as ‘nice-to-have’ features.

What stands out here is that travelers increasingly want to go “digital”—keywords such as IFE, Wi-Fi, USB ports, streaming music, etc. were clearly highlighted. In fact, Digital Accessories are only superseded by core topics such as Seat Comfort, Carry-on Luggage, and Punctuality (based on relevance). Even Boarding and Check-in aren’t mentioned as much. Therefore, airlines should acknowledge the significance of this topic for customers and prioritize it on the same level as Seat Comfort.

This category also provides answers to one of the biggest questions in commercial aviation: Do travelers expect to be entertained onboard?

The short answer is yes. However, airlines don’t have to carry the burden. Travelers want to be entertained but they also don’t mind bringing their own entertainment on their phones, tablets, or laptops. Airlines simply need to provide the infrastructure, such as charging points and internet connection.

Iberia is a frontrunner in this trend, as it already offers a wireless inflight entertainment platform that can be loaded through a device (phone, tablet, computer). The platform offers the same standard options as other IFE systems, e.g. movies, games, music, but on a personal device, not a built-in screen. According to Iberia’s report, customer satisfaction increased by 35% after implementing the digital system.

The bottom line is that travelers do expect entertainment onboard. However, mobile proliferation is changing the way customers consume content onboard. For short-haul flights, airlines could satisfy customers by providing charging ports or Wi-Fi. For long-haul flights, travelers appreciate a full in-flight entertainment system with native screens, which also accommodates non-digital natives.

4)    A long way to go for luggage but it should be digital

It should come as no surprise that the topic of Luggage, be it Carry-on or Check-in, is a pain for travelers. Given the all-too-common complaints about excess weight and limitations on the number of allowed pieces, it’s interesting to see that Carry-on Luggage is not a bigger pain. For decades, airplane manufacturers have worked on optimizing luggage space onboard. Many airlines use favorable Carry-on Luggage rules as a differentiating factor. Nonetheless, it seems that travelers have learned to accept this hassle.

The topic of Luggage Handling (bottom left position in the matrix) presents a slightly different picture. This category mainly talks about checked-in and lost luggage, and while it shows the most negative sentiment, it is barely represented by volume. This may be because airlines and airports have collaborated with IATA to develop an efficient process that enables baggage tracking across the whole industry, reportedly improving baggage handling by 66%.

Still, its lowest sentiment in the matrix reveals there is a lot of space for improvement. Again, digital solutions can help. For instance, American Airlines introduced a Baggage Notification System that allows its customers to track the status and location of their checked luggage. And it seems to be exactly what travelers want. SITA found in their 2019 report that passengers who received mobile notifications about their baggage status reported an 8.6% increase in satisfaction compared to travelers who relied on flight information displays and public announcements at the airport.

And there’s more to it …

Reviews have proven to be a powerful source of insight into consumer preferences and needs. These discoveries can form the basis of a strategic roadmap to help companies prioritize what issues to tackle first.

We encourage travel providers to not only establish an industry overview for their field but also to create a matrix of their own reviews and compare them with the industry benchmark. This way, the matrix can measure performance over time and track the progress of various innovation efforts.

This article was originally published on


Three Key Ways Virtual Cards Are Supporting Airlines

Three Key Ways Virtual Cards Are Supporting Airlines

Author: Chiara Quaia, VP Market Development – Travel, Mastercard

2020 will be forever remembered as the year that the travel industry dramatically and fundamentally changed. While COVID-19 laid bare weaknesses across multiple industries, possibly the most significant impact has been seen across the travel sector, where organisations large and small continue to navigate unprecedented challenges.

Research shows that although consumer travel plans may be on hold in the immediate term, people will still want to travel in the future, so short-term liquidity is now essential while the industry works towards improving virus hygiene across the entire travel experience. Latest insights from Mastercard through its Recovery Insights: Travel Check-in report based on analysis of anonymized and aggregated sales activity across our network, including in-person and online transactions, shows that promising signs are beginning to emerge in consumer spend – with Italy, Russia and France leading in terms of travel and entertainment spending.

As an industry our collective responsibility is to leverage the technology and partnerships available to support liquidity and mitigate risk. Working together to ensure that travel organisations not only have the ability to navigate the current situation but to emerge stronger than before, supported by solid foundations that enable greater agility and protection for the future.

Here are the 3 key ways that virtual cards are supporting airlines:

  1. Payment Guarantee: Instability across the travel ecosystem means that airlines need to ensure that they are not negatively impacted by third party bankruptcies and insolvencies. Right now you need confidence that you will receive payment for sales and virtual card acceptance makes that possible.
  2. Incremental Sales: Today, strengthening strategic relationships across the ecosystem is essential in order to support as many sales channels as possible. Virtual cards give travel agencies payment guarantee, meaning that they have confidence when selling experiences on your behalf. By utilizing virtual cards and boosting relationships between airlines and travel agencies, the whole travel ecosystem has the confidence to continue to interact – helping everyone to capture incremental sales.
  3. Speed of Settlement: Right now liquidity is key and making sure you receive revenue from sales as quickly as possible is critical. While legacy payment processes can see settlement 30 days plus, virtual cards speed up this process and support quicker access to essential cash flow.

In a different world I may also be talking to you about how virtual cards offer enhanced operational efficiency, payment automation and fraud protection but right now these significant additional benefits come second to essential efforts to preserve liquidity, facilitate payment protection and support incremental sales.

The Mastercard Wholesale Program, a virtual card solution specifically designed for the travel industry, recently expanded to offer more flexibility between airlines and travel agencies through additional pricing tiers. The Program provides a set payment structure, which isn’t impacted by geography, and our expanded product tiers give travel organisations total flexibility to agree mutual beneficial terms.

As the travel ecosystem responds to the global situation and we come together to not only preserve the industry but fuel growth, let’s take the opportunity to ensure that the new normal we are working towards is one that is stronger than before.  As airlines and organizations across the industry navigate the challenges they face Mastercard remains firmly by your side, ensuring that payment innovation is doing its part in laying firm foundations for a future that supports greater resiliency and growth. 

How can airlines earn more revenue with an optimized payments infrastructure?

How can airlines earn more revenue with an optimized payments infrastructure?

By Vojin Rakonjac, Head of Payment Solutions, Voyego

Airlines have complex payment processes that occur through various sales channels, devices, countries, currencies, payment instruments and intermediaries. Similar to flights themselves, payment data has a long way to travel until it reaches its destination. It is passed from customer to airline, from airline to 3rd parties and corresponding payment processors, and finally, funds are transferred to the acquiring bank. Behind every transaction, there is a delicate orchestration of steps and routes that the payment must take. Every decision on this route directly impacts an airline’s revenue, where an ineffective turn represents an additional cost.

Optimizing payment infrastructure and preventing revenue loss means removing barriers that affect both customer experience and the airline’s bottom-line. Customers are interested in financial paths of least resistance, which includes short and familiar processes, removing friction at checkout and enabling a payment method that reflects customer preferences. On the other side of the process, an airline needs to guarantee safety and cost-efficiency, namely by honouring regulations such as PCI, preventing fraudulent activities and guaranteeing connectivity to processors that enable better acceptance rates and lower fees.

Payment barriers that directly impact revenue

Payment transactions are short in duration compared to the total amount of time an airline’s customer spends traveling. But these moments count. If a customer wants to make a payment and an airline can’t support their preferred method, revenue is lost. It is important that these payment methods are accessible throughout all sales channels. For example, when Finnair introduced Alipay for in-cabin payments, sales increased by 200%.

Revenue opportunities are lost if there are too many steps in the payment process or a customer is redirected multiple times to 3rd party websites. If there is technical downtime with either the airline, processor or the acquirer, a customer will abandon the payment and most likely won’t return – another example of an uncompleted payment and lost revenue.

How do you make a safe payments path?

Firstly, you need to take care of potential fraudsters. It’s proven that the airline industry loses $1.4 billion per year just on fraud. Different PSP’s have different systems and rules that are associated with fraud and yield different results. The airline industry has specific customer needs and airlines should consider having an in-house solution for their tailored requirements.

What about data hijackers? These will wait at all crossroads where airlines exchange sensitive data with business partners and providers. PCI regulates these paths, but it is an airline’s responsibility to make them safe. If a data hijack occurs, this can result in a hefty fee and a reliable way to prevent this is for an airline to partner with a tokenization provider. Tokenization providers enable airlines to pass sensitive data to partners through their gateways, taking full financial liability in case of stolen data. They not only guarantee liability in the case of fraud, but they provide more cost-efficient Card Data Vault than PSP’s.

How to build a cost-efficient payments path?

The first step is to make sure you have alternative routes. If there is a barrier and a payment can’t be processed, make sure you have a way to retry with another processor. If not, everything stops until this is resolved. When choosing a PSP, remember that not all PSPs are equal. Some PSPs can offer better acceptance in specific regions or better commercial agreements than their competitors. The “Toll” that you pay will be different depending on the route you take. Also, make sure you have proper acquiring. A customer’s geographic location causes a transformation of all payments into local transactions, eliminating cross-border and currency conversion fees for international transactions. Simply having an option to choose between multiple providers and acquirers guarantees a better negotiation position. You can choose how much volume you will direct towards which Acquirer or processor based on the fees they offer.

How to avoid write-offs?

Even if payment instructions are sent and the payment is processed, the journey doesn’t end there. You need to make sure that nothing is lost along the way. This means that all the fees and transactions are captured and matched to reconciliation/settlement files from the processor/acquirer. Airlines allocate resources to write-offs in case of mismatched financial records. Having more payment instruments and more processors increases the chances that these mismatches will occur. This is simply because there are more contracts, more fee types and more documents that someone needs to cross-reference. If this process is manual, chances of mismatches increase even further. Having fees configured according to commercial agreements enables you to track and catch any changes automatically. Airlines should store as much transactional data as possible to be able to map it later more precisely. Having an automated engine that will collect different types of reconciliation reports and automatically mapping them to internal financial records lowers the number of write-offs and ensures that airlines pay only their obligated fees.

What to do with an optimised payments infrastructure?

Once you have a friction-free, safe path that is both cost-efficient and transparent, airlines can work on their cost-optimisation strategies. Here, you need to think of who can guarantee better deals for specific countries or regions as well as who will enable better acceptance rates. Airlines can gather all the offers and work on a configuration that will be more efficient than what is currently offered. Here, it is crucial that airline has a way to simulate the  impact of contract changes without any IT involvement. By simulating new environments and tweaking payment paths, airline can understand how additional revenue can be collected through more acceptance, lower fees and less write-offs.

The Travel Payment value chain, impact of COVID-19 and what’s next?

The Travel Payment value chain, impact of COVID-19 and what’s next?

The economic impact of COVID-19 has exacerbated existing challenges for the travel industry, while adding significant new pressures. A lack of visibility and predictability over payment flows, long settlement periods, a lack of automation as well risk associated with data protection and fraud have long called for industry wide digitization to enable players large and small to interact more efficiently, more effectively and with greater flexibility.

Recent pandemic containment measures such as travel restrictions and quarantines have brought about significant unforeseen additional challenges, severely affecting the entire sector. While lockdown measures continue, the booking cancellations that operators face mean that the industry is currently paying out a substantial amount in refunds compared to what it is receiving in future bookings. Liquidity is now key and customer service is essential to protect long term relationships with travelers.

For an airline, already faced with a long list of objectives to cover; costs, conversion, user experience, cashflow, channels, integration, reconciliation, data security, fraud risk, compliance and regulations to mention just a few, when local governments shut down travel due to COVID-19, the massive number of flight cancellations added the urgent need for a strong focus on re-bookings, refunds (via call center, website and social media), loyalty, business continuity and in some cases survival.

Money flow suddenly reversed, sales abruptly stopped, and payments already received by the airlines for future departures had to be refunded, as mandated by local legislation. In addition to  cash flow challenges caused by returning funds for months’ worth of bookings, airlines are faced with an unprecedented increase of customer service enquiries causing staffing issues and processing delays.

In an attempt to save hard needed cash, as an alternative to refunding the passenger, airlines started offering “vouchers” that can be used for payment of a future booking. These vouchers are typically valid for 12 months and can be used for bookings, in most cases, within a one year window. To incentivize the customer to utilize these vouchers, some airlines are also offering a “bonus”, for example 15% on top of the original amount. If the voucher is not redeemed within the validity period, automatic cash refunds will be initiated by the airline. Until recently, vouchers such as this have only been used as compensation, for example in the case of delayed flights.

As we move forward with the new normal we face and travel corridors and borders start to re-open and flight schedules come back online, it’s a good time to consider what payment trends were emerging before the outbreak that have the potential to enable a robust recovery.

In a recent Up in the Air poll on LinkedIn for B2C, credit cards in a mobile wallet and pay later solutions came out as the winners. Insurance against airline defaults and delayed payments come to mind as triggers behind this. In a similar poll for B2B, Virtual Card Numbers came out on top, airline and travel agency default protection, flexibility and opportunity to ramp up sales contributing to the result. Polls like this bring to life the key priorities of liquidity, security and flexibility and with such priorities set to remain for the significant future, it’s clear to see where virtual card technology could have an impact as we stabilize and recover.

The challenge now for organizations across the B2B payment space is to help airlines and agents with products that strike a balance between (incentivizing) sales, (lowering) processing costs and (improving) speed of payment, but are also scalable and relatively easy to implement / roll out.

According to Chris Fendley, EVP, Mastercard the organization has taken multiple measures to help airlines and other travel providers navigate the current challenges; “By extending guidance on rulings and best practice education and suspending excessive chargeback programs, we remain firmly by our partners side.  Through our partnership with Ethoca we are helping to proactively resolve consumer disputes before they escalate and by launching new pricing tiers to the Mastercard Wholesale Program virtual card solution, we aim to increase protection and enable flexibility for travel buyers and suppliers in order to support growth.”

Covid-19 has shone a spotlight on friction across travel payment flows, our collective opportunity is to leverage the technology available and develop common standards across the ecosystem that support liquidity, mitigate risk, enable predictability and deliver flexibility – ultimately enabling the industry to emerge stronger than before and supporting greater agility across the sector.

Mastercard hosted a webinar on the payment value chain, you can view the webinar on demand via this link.

Download the presentation slides here.

3 ways your customers are transforming travel payments

3 ways your customers are transforming travel payments

Why travelers expect new ways to pay

Admit it, you’ve never really loved paying for travel. 

If you’ve bought a flight or rented a hotel room this century, you’ve probably noticed a clunky and archaic payment experience. That’s because credit cards have long been one of the few ways you could pay for travel.

Consumers want payment choices

That’s changing now though. Airline passengers and hotel guests are fed up with paying the same old way, according to new Trustly research. Our survey shows 71% want more than card payments at the checkout. 

Our survey also found that 31% of travelers will actually abandon a purchase because of a lack of payment options. 

If that figure startles you, it should. It’s a reminder you need to give consumers a frictionless and flexible way to pay across the customer journey.

Across the payments landscape, companies have taken notice. Ovum’s 2018 Global Payments Insights Survey highlights how personalisation and ‘invisible payments’ will be key areas of focus for merchants, billing companies, and retail banks. In fact, more than 75% of organisations surveyed told Ovum they’re already earning customer service wins through real-time payments. 

Millennials expect better experiences

So, which consumers are driving this shift? You guessed it, it has a lot to do with millennials. The Pew Research Center defines millennials as anyone born between 1981 and 1996.  Now the world’s largest demographic, millennials are an economic powerhouse.

New Research: The New Way to Pay

Strapline: Why the travel industry needs TO THINK BEYOND CARDS

Get the report

Tellingly, they’re digital natives. So it makes sense that their expectations as digital consumers are high. How travel merchants design and personalise services and products can shape millennial purchasing decisions – often in the blink of an eye. 

Just look at the findings of the 2019 Travel Trends and Expectations report

from Mastercard and Wex, for example. It highlighted that millennial and Gen Z travellers are three times more likely than Boomers to let AI plan a trip using their past travel data.

In fear of payment fraud

But just because consumers want more ways to pay and more personalised experiences, that doesn’t security and fraud concerns go away.

“Implementing alternative payment methods – simply providing consumers with more options – is not the same as more choice.” — Mike Parkinson, Trustly’s UK General Manager and Director of Travel.

High profile data breaches and well-publicized cyber-attacks have damaged trust. Consumers are more savvy about sharing their financial information with multiple businesses. It’s led to a rise in more complex authentication and identity verification processes – some of which have hurt consumers’ overall buyer experience. 

More than half of merchants in that same Ovum survey say concerns over the risk of a data breach have limited their investment in customer experience. 

“Without a doubt, it can be a complex and technically challenging endeavor, especially for those in the travel and aviation sector using legacy systems built on rules from decades ago,” says Mike Parkinson, Trustly’s UK General Manager and Director of Travel.

So travel merchants face a twofold challenge: balance consumers’ growing desire for payment flexibility and personalisation with data security. It’s not going to be easy. 

Your travel business will take off with a pay-over-time option

Your travel business will take off with a pay-over-time option

The travel industry needs to respond to the shifting demands of its customers, from discovery to check-in. This new generation of travelers requires convenient and mobile-first technology.

Preferred features in this tech setup  include alternative payment methods that fit the lifestyles of today’s travelers. Offering a pay-over-time option, like Affirm, will change a consumer’s travel booking behavior and open the door to new, modern customers. Travel merchants may be missing out on a large portion of customers who don’t have access to credit or don’t want traditional credit products.

Affirm’s travel partners, including Orbitz, Expedia, CheapOAir, Priceline, and Fareportal, have seen dramatic results after implementing Affirm. A performance analysis of the of 25 Affirm travel brands during 2018 showed that, after implementing Affirm, businesses saw an average of:

  • 90% increase in average order value
  • 5% increase in conversion
  • 21% 12-month repeat purchase rate
  • 80% increase in booking windows

Pay-over-time options provide an opportunity to capitalize on the changing landscape of travel. Below are five ways installment payments can enhance your business.

Target millennials

Millennials dream of international travel and would rather pay for a flight than buy a house. Millennials took an average of 3.5 vacations in 2017, and 35% of them intend to take more vacations this year. The millennial travel market is valued at over $200 billion. But acquiring and maintaining this group as customers will be difficult when a third of them don’t have a credit card, and two-thirds have a strong fear of debt.

Unlock these customers with a modern alternative payment method tailored for the experiences millennial travelers want. By giving them the option to split up expensive travel purchases over time, an option like Affirm can open the doors for people who don’t want to use credit cards.

Become the one-stop shop for all travel purchases

Consumers follow a specific cadence when booking travel: flight first, hotel next, then activities and meals. They tend to buy these items over several weeks while preparing for a vacation. For many travel merchants, the goal is to be the one place where those consumers will eventually buy every aspect of their travel experiences.

Offering a pay-over-time option can encourage consumers to come back to your business for all their travel needs. With Affirm, travelers can be pre-approved and reminded of the amount they are allowed to spend, encouraging repeat purchasing with your brand. They can even continue to add ancillary purchases to their loans for 21 days after an initial purchase.

Spark brand loyalty

The first step in checkout is the most significant drop-out point for customers, usually due to a price concern. The abandon-cart rate for travel sites is 82%. A partnership between your business and Affirm offers a solution to work within a customer’s budget and communicates a customer-first approach.

By offering a pay-over-time option, you are proactively responding to your customer’s needs and creating an engaging touch point. For example, Affirm customers have a higher lifetime value when compared to non-Affirm shoppers, with 21% repurchasing with Affirm. Customers love our simple and transparent process. We only ask for five pieces of information, offer a real-time decision, and have no hidden or late fees. The halo effect from Affirm can produce strong loyalty for your brand.

Break down the price barriers for adding ancillaries

Travel expenses add up quickly, and consumers no longer buy just a single flight or hotel room. They have to purchase a seat, a meal, luggage, and sometimes a balcony room or Wi-Fi. These ancillary purchases drive up the final amount and can be daunting to would-be customers. The thought of paying a premium to upgrade can seem out of the question when all the customer sees is the lump sum at the end.

Offering a pay-over-time option means these upgrades become a few dollars a month instead of an extra $100 at checkout. The better experience becomes more realistic to consumers when they can pay for it over time, increasing average order value and giving your travelers the trips of their dreams.

Increase the booking window

Booking flights and other travel expenses early is a win for both the consumer and the provider. Travelers get a better deal, and businesses are able to more accurately predict their revenue. But it can take time for shoppers to save the funds for an expensive flight. They must spend a few months stockpiling, and by then the price may have doubled or even tripled.

A pay-over-time option allows travelers to buy their flights earlier and pay in smaller installments they can afford over a few months. With Affirm, some merchants report consumers booking 80% further out from their travel date, allowing travel businesses to avoid risk, uncertainty, and having to drop their prices to sell empty seats.

Affirm is modernizing consumer credit and changing the way people book travel, and we can help your business take advantage of these opportunities. We partner with 2200+ retailers and dozens of travel brands to boost their conversion rates and average order values. Our simple and transparent process improves customer satisfaction, driving up repeat purchases and brand loyalty. Through advanced underwriting we reach those overlooked by the traditional credit system. With a lightning-fast, mobile-first UI, we’re built to seamlessly integrate with your checkout flow and make purchasing quicker, simpler, and more consumer-friendly.

Read our travel ebook for more details on the benefits discussed above, as well as a secret shopper survey and testimonials from our travel partners.

Want Affirm on your travel site? Contact