How digital payments can help travel rebound

The signs are clear: travel is back – with all its joys, and headaches. After more than two years of pandemic headwinds, the expectation is for global tourism and travel to grow by more than $8.6 trillion in 2022 alone. Across the United States, there are more and more indications that travel has returned. In California, more than 13 million travelers passed through Los Angeles International Airport during the first quarter of 2022 – more than double the number from 2021.

Travelers are heading out despite crowded airports, flight cancellations, higher costs and lingering concerns over COVID. Amid all of this, payments can be the easy part: but the right tools must be in place. Digital-first options that give the consumer more flexibility, control and convenience over the way they pay are becoming the rule and not the exception. 

Here are three ways that digital payments tools are primed to help the travel industry take advantage of this rebound to reduce the headaches and boost their bottom line. 

Taking contactless to travel

Travel may be back, but the way consumers expect to make payments will never be the same again. When it comes to everyday purchases, consumers have embraced methods like contactless enabled cards and digital wallets.

With the uneasiness of the pandemic still present, tools that eliminate the need for contact during a journey boost confidence. Contactless payments have seen widespread popularity worldwide with more than 50% penetration of contactless payments in 70 countries.

Looking at travel on a more localized level, the popularity of contactless payment options is readily apparent. In the U.S., transit systems from major metro areas like New York City to regional operators like Monterey-Salinas Transit have taken steps to meet the growing expectations of consumers with respect to touchless transit. 

Regardless of the destination, travelers want an uncomplicated experience.  

Building trust and preventing fraud

Building travel confidence in the payment experience will be critical, both in meeting expectations and in building back to pre-COVID levels. Travel involves a lot of moving parts, often in cross-border situations with travelers seeking out an assurance that their transactions are secure and protected, while also having a speedy authorization process.

As the way consumers pay and transactions are handled continues to change, so too are the attacks launched by fraudsters. From chargebacks and declines to account takeovers, preventing fraud is critical and becoming more complex by the day. 

The travel industry now faces new challenges that are compounding the more common forms of fraud. According to recent research, 46% of merchants surveyed stated reducing fraud and chargebacks was a top priority for their business. And while not all are malicious, double dipping of refunds and chargebacks – when a cardholder receives a refund from the issuer – can be a serious risk in the travel space as well.   

Improve revenue and cashflow

Delivering these new payment technologies is no doubt a boost to the customer experience. But the benefits are not one sided – building in digital payments tools opens up more opportunities for businesses to get a handle on and improve their overall cashflow and revenue. 

Adding options like installments can make travel more accessible and help drive conversions. Installments have seen widespread growth among consumers and a 2021 survey found that a majority (56%) had reported using the method at some point for a purchase.  

And for employees in the tourism industry, where tipping is often crucial, digital tipping solutions that let consumers quickly and securely tip staff through a QR code or app using their debit/credit card, negate the effect of an increasingly cashless environment.

Digital innovation has long been central to the evolution of payments in travel. Embracing it today is essential in a marketplace that is more competitive than ever.