The travel industry has emerged as a significant landscape for payment innovation, particularly as it attempts to adapt to shifting consumer expectations in the post-pandemic landscape. A central theme in this ongoing transformation is payment orchestration, which has gained prominence as a tool to enhance, streamline, and secure payment processes. This development serves not only to improve operational efficiency but also fundamentally alters how travel brands interact with their customers.
Speaking during a discussion for the series “PYMNTS Outlook 2025: Navigating the Future of Banking and Payments,” Kristian Gjerding, CEO of CellPoint Digital, highlighted the complexities faced by airlines and travel businesses. "The traveler journey is complex," Gjerding remarked, addressing the multitude of variables that airlines must manage, including multiple currencies, varying refund rules, specific payment regulations, and millions of digital interactions. He noted that the industry's recovery post-pandemic has coincided with a demand from contemporary travellers for experiences that are not only fast and flexible but also frictionless.
Gjerding stressed the potential pitfalls for airlines concerning payment experiences, indicating that the stakes have never been higher. He stated, "If I have a bad checkout experience, I may buy your product through an intermediary, which is a very, very costly process," underscoring that poor payment interactions could significantly inflate transaction costs, noting that the costs could exceed tenfold for the same transaction if customers opt for an intermediary service instead of purchasing directly from the airline.
To mitigate these challenges, Gjerding argued that it is critical for airlines to offer seamless payment processes that cater to diverse traveller preferences. "Travelers want to pay with whatever method they think is most valuable to them. If we don’t serve them, they’ll find other routes to get the same product, even from you as a travel merchant," he emphasised.
Gjerding outlined the evolution of payment orchestration as a pivotal development in the travel industry’s digitization efforts. He highlighted that within the tech sector, there exist various phases of innovation, with payment orchestration transitioning from a novel solution to a critical platform necessity. "The market is driving in that direction," he stated, pointing out that effective orchestration can result in fewer abandoned shopping carts and enhanced conversion rates via simplified payment systems.
One notable development within this sphere is the industry's transition towards an offer-order model, inspired by the practices of eCommerce leaders like Amazon. With this approach, customers can consolidate their travel-related purchases—flights, accommodations, and other services—into a single digital basket, offering a "near-Amazon-like checkout experience." Gjerding characterised this shift as a "once-in-a-lifetime transformation" specifically for the travel sector, while also acknowledging the complexity it introduces for travel merchants. "You’re going to have a hard time making it without payment orchestration in the offer-order industry," he cautioned.
Beyond merely enhancing efficiency, payment orchestration is seen as a facilitator of new growth opportunities within the travel sector. For example, airlines might explore subscription-based flight models, while hotels could refine their loyalty programmes to allow real-time use of points for upgrades or dining. Gjerding also noted the increasing significance of alternative payment methods (APMs), predicting a future where bank-to-bank payments and potential cryptocurrency transactions will play an increasingly larger role in the payment ecosystem.
As businesses within the travel sector navigate this new era, Gjerding concluded by asserting the vital need for flexibility in payment orchestration platforms to accommodate evolving consumer preferences and compliance across diverse regulatory landscapes. "If you don’t have proper payments, you’re not going to make revenues," he warned, as the industry stands ready to embrace transformative practices like offer-order along with ventures into new markets.
Overall, as travel companies continue to adapt to current and future trends in technology and consumer behaviour, organisations like CellPoint Digital may significantly influence the landscape of payments, aligning operational capabilities with the demands of modern travellers. The ongoing shift towards comprehensive payment orchestration appears poised to play a critical role in this transformation.
Source: Noah Wire Services