04 Feb

Can payments be a revenue driver for travel agencies?

Damian Alonso, Head of Payer, Amadeus Travel Payments 
Guest ABTA Partner blog for the Business Travel Show and Travel Technology Europe (TTE) 2020

We have been helping travel executives all over the world turn payments challenges into opportunities, so they can reduce cost and increase sales. What’s common to those that are successful on this journey is a commitment to making bold and decisive improvements to their supplier payments strategy. 

At Amadeus, we sit at the intersection of travel and payments challenges, meaning that we are in the middle of a ‘perfect storm’ with disruption coming from customers’ new behaviors, new regulations, new business models and new technologies – all affecting travel as a whole, but also how people pay for travel specifically. We are also witnessing the ‘consumerisation’ of the B2B world. If travel agents are used to buying with one-click in their personal life, shouldn’t they expect to pay suppliers just as easily at work? 

Here are our five supplier payment trends for 2020 that can help your agency drive revenue and growth: 

1. Payments APIs
Payment Application Programming Interfaces (APIs) have emerged as a key way for agencies to make payments faster, smarter and cheaper by plugging into a single system. This is the connectivity underpinning innovations like our own B2B Wallet, which allows agencies to pay airlines, hotels and others using a wide choice of different methods. Applying intelligent optimisation to your eWallet can automatically propose the right payment method to, for example, maximise revenues via rebates and save costs. We’ve seen this approach deliver up to 30% margin improvement for agencies. 

2. Tokenisation
Processing payments is complex, and much of this complexity comes from the need to mitigate fraud and secure data. Many payments experts will tell you that tokenisation represents the next step in the evolution of digital payments, but, for us at Amadeus, it’s very much the here and now. Take single-use virtual cards as an example, by creating a 1:1 set-up i.e. one number for one specific payment transaction, exposure to fraud is drastically reduced and helps agencies meet the Payment Card Industry Data Security Standard (PCI DSS) requirements.

3. Integrated point of sale
The rise of virtual cards is made possible by their integration into the booking tool hence creating a ‘central payments hub’. This ‘central payments hub’ will help you to control payments end-to-end, from the moment the traveler pays, right through the chain, until the money is settled with the travel supplier. At Amadeus, we’ve innovated on top of this trend with an orchestration layer in our Xchange Payment Platform, which proposes the most efficient way to route payments using data-driven analytics and machine learning. So, if you want a payment to flow in a way that minimises the cost of payments or generates revenues, you can set it up.

4. Win-win partnership
For digital supplier payments to be successful, it requires collaboration – travel agencies need to be ready to use virtual cards, and travel merchants like airlines need to be willing and able to accept them. We observed some friction here, as certain merchants faced high acceptance costs. That’s why we’ve been investing in a new approach that can reduce the overall cost of supplier payments acceptance up to 70% whilst better aligning the interests of airlines and their travel agent partners. Thai Airways has seen great results since implementation with travel agencies and has fostered improved loyalty. 

5. Real-time payments
Even as we head into 2020, the B2B travel payments space is still dominated by manual processes. It’s a historic issue as the industry has tolerated payment systems that ‘work well enough’, but that’s just no longer ambitious enough – people now expect payments to be automated and fast.

With real-time API integration, agents can innovate in a new way by offering multiple currency payments and catering to last minute bookings. New digital payment methods like virtual cards are real-time, automated and offer agents opportunities to increase revenue and reduce costs. 

Is payments really an area of the business you can choose to ignore? Join us to make bold advances in your payment strategy. 

Visit our Payments experts at the Business Travel Show and Travel Technology Europe on 26-27 February at Olympia London to find out more.