The opportunity for airlines with mobile payments

Feb. 23, 2016 | by Kristian Gjerding
The opportunity for airlines with mobile payments

There's a lot at stake for companies that get mobile payments right. How much? Potentially tens to hundreds of millions in new and incremental revenues in a marketplace that is increasingly defined by the smartphone and mobile payments technologies.

Three tactics: more conversions, higher acceptance rates for payments, and support for a wide variety of alternate payment methods (including popular and regional digital wallets) will help businesses capture that revenue and simultaneously turn their customers into satisfied consumers.

Just how large and potentially lucrative is the revenue for airlines? CellPoint Mobile’s recently released Mobile Payments Imperative report highlights the following:

  • More mobile activity: 60 percent of the world's population will own smartphones by 2019, according to Forrester, and sometime this year (2016), eMarketer predicts that consumers worldwide will own a total of 2 billion smartphones, with India surpassing the U.S. as the largest smartphone market
  • More mobile commerce: digital travel-related transactions are estimated to rise to $762 billion by 2019, according to eMarketer, with much of the growth occurring in Latin America and Asia. Other industry experts predict that mobile devices will account for almost a quarter of all transactions worldwide by 2019, more than half of them taking place via alternate payment methods (APMs) that include Android Pay, Apple Pay and Samsung Pay. 

That revenue, and those opportunities, await businesses (particularly airlines) that are taking steps now to support a variety of payment methods, mobile devices and mobile technologies – regardless of currency or channel. Airlines can watch revenues grow from more ticket sales and from the ability to sell more ancillary products and services directly, rather than sharing profits with online travel agencies or third-party retailers.

Success in the mobile environment requires executives and payments officials to embrace one central thought in their pursuit of higher revenues: as you move to roll out and support mobile payments, focus primarily on doing it well.

Do mobile payments well, and customers will use their mobile wallets and a variety of supported payment methods to purchase products and other services directly from an airline rather than a third party vendor. Direct-channel revenues do not have to be shared with online travel agencies, ancillary product providers or other third-party firms whose services often include a cut from airlines.

The most functional mobile payments solutions are those that focus on core tactics:

  • Turn lookers into bookers – a process that improves the conversion of interested consumers into paying customers
  • Improve acceptance of payment transactions that are free of slowdowns, delays and re-entry of the same data into different platforms for the same purchase
  • Support a range of alternate payment methods and digital wallets (former, current and future), including Android Pay, Apple Pay, Samsung Pay, MasterPass, Visa Checkout, Amex Express Checkout, M-Pesa, prepaid cards and others. Make it easy to buy from you, and passengers will turn to you first for whatever they need.

Numbers tell the story – the story of opportunity, the story of an industry in transition, the story of potential revenues waiting to be captured. Success will flow first to businesses that embrace and support the mobile payments evolution quickly…and that support it well. 

Topics: Mobile/Digital Wallet, POS, Retail, 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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