WEX Travel Presents Insights on Adopting a Customer-Centric Payment Strategy at TTE 2016

WEX Travel enjoyed collaborating with customers, thought leaders and other industry professionals while attending the Travel Technology Europe (TTE) 2016 conference in London, UK, from 24-25 February.

In addition to exhibiting alongside technology system and software leaders in the travel and hospitality industries, Head of Travel at WEX Europe, Lee Jackson, led a panel discussion around the subject ‘Why customers should drive your payment strategy’. Lee was joined by representatives from Grasp Technologies, Miki Travel and Carlson Wagonlit Travel.

We’d like to share some of the key takeaways the panel session:

• Payment strategies should be competitive and customer-centric. A travel provider’s payment strategy should impact the product and service they deliver to customers; their strategy should enable them to offer the best prices while protecting, and even enhancing, their cash flow.

• To remain competitive, OTAs need to provide customers with low deposit payment options—while mitigating the potential risk and impact on cash flow. Leisure travelers increasingly want to take advantage of low-fare offers allowing them to “book now” with a limited deposit. The challenge for the OTA is that in order to secure on low cost airline component, they’re required to cover the full fare at the time of booking. They need a funding solution to protect them from the financial risk they assume when offering a low deposit customer payment option.

• Business travel programs also need payments-related cash flow protection. Both TMCs and Corporate Clients are reviewing their payment strategies in light of more frequent remittance on airline payments. In addition, they’re making payments to a very disparate group of suppliers who often need absolute and immediate confirmation of payment in order to deliver services. 

• The rates suppliers offer to travel providers vary by payment method. There are circumstances where the costs associated with a provider’s preferred payment method may be absorbed by the supplier, and times when they won’t. In either case, there’s a direct impact on the prices offered to leisure and business customers at the point of reservation. Airlines tend to not absorb credit card costs and they will increase the fare where they incur a higher cost of acceptance. 

• Repeated use of credit cards open up the risk of fraud. Aside from the obvious expense, the very practice of handling credit card fraud instances undermines a travel provider’s intentions to simplify the booking/payment process and deliver excellent service.

• A virtual card program can provide OTAs, TMCs, and Corporate Clients the necessary cash-flow protection without incurring high borrowing costs. WEX can provide commercial lending that allows the OTA to support the low deposit model with minimal, if any, impact on cash flow. This means providers can move away from corporate credit cards that can be susceptible to fraud and can incur additional costs. A virtual card transaction is single-use and locked-down to merchant category codes, so fraud is almost eliminated. A new number is created for each individual booking as part of the booking process, and makes no impact on the agent or consultant providing customer service. What’s more, firms can also select a virtual card backed by credit or opt for a debit card to avoid the higher credit card fees.

Learn more in this recap on Travolution.co.uk.