Airlines should pursue partnerships with payments innovators

May 6, 2016 | by Kristian Gjerding

I recently posed a very simple question to a room full of airline executives who attended a panel discussion in which I participated: "If you do not own a smartphone," I said, "please stand up."

Needless to say, no one stood up.

Around the world – and especially as they fly around the world – today's travelers all carry some kind of mobile device with them. Even in extremely rural/remote areas. Even in undeveloped countries. Even in instances where Third World travelers might be getting onto an airplane for the first time in their lives.

Without fail, each modern-day traveler clutches an Android phone, an iPhone or some kind of handheld mobile device to help them communicate, stay in touch and manage their trip. And ideally, they increasingly want that same device to enable them to pay for everything travel-related throughout their journey. The easy ability to buy means new revenue streams for airlines.

Missed revenue opportunities

That same opportunity, however, is where airlines struggle, because they are unable to control the pace at which mobile technologies and mobile devices are changing, innovating, upgrading and supporting new capabilities. Nearly every day, a new payment technology or smartphone feature is announced as the "next best thing," and it's hard for all businesses (airlines included) that sell to the global marketplace to catch up and stay current.

In that sense, today's passengers and consumers are far ahead of airlines in their embrace and adoption of "mobile-first" everything as they travel.

Key points emerged in our panel discussion:

• Airlines must partner with companies that are driving innovation, including Google (Android Pay), Apple, Samsung, Facebook, PayPal and others, in order to stay "current." Partnerships with technology and device experts help airlines gain access to the technologies and capabilities that make it easy for passengers to travel, buy and pay.

• Airlines must do a better job of collecting, integrating and using the data they already possess about passengers to make travel a more seamless, frictionless, pleasant experience. If data that's now in silos can be harnessed to intelligently recognize passengers, market to them personally, and authenticate their transactions easily, those passengers will be more satisfied and more motivated to buy more. And airlines can take advantage of tens to millions of dollars in new revenue streams.

• Airlines need underlying enterprise platforms that make it easy to update, edit, modernize, connect and deploy new devices and technologies. They can no longer afford to wait months or years for IT teams to update old systems or support one new payment method at a time. Technology changes too rapidly for that legacy approach to continue. The focus instead should be on flexible, modular, easily updated and foundational commerce orchestration systems that support payments-devices-currencies of all kinds.

All partners in this payments ecosystem need to do a better job of working together, sharing data and making it easy for airline passengers to use their ever-present smartphones and mobile devices to book, buy, fly and pay – anywhere in the world, and for any product or service they want.

For airlines specifically, that kind of flexibility means more pathways to purchase and a greater ability to tap into the estimated tens to hundreds of millions of dollars in new and incremental revenues that await from mobile payments.

Topics: Handsets / Devices, Mobile/Digital Wallet, Mobile Marketing, Trends / Statistics

Kristian Gjerding
Kristian Gjerding CEO of CellPoint Mobile, a payment solutions provider for airlines. Gjerding has helped shape the digital payments environment through his work with best-practice standards groups at airline organizations globally. View Kristian  Gjerding's profile on LinkedIn

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