5 Reasons Why Online Travel Agents Need Payment Orchestration
Online Travel Agents (OTAs) are one of the most important components of the modern travel industry, with OTAs being the primary booking channel for many holiday makers. OTAs have had huge success over the past decade with a growing volume of customers, cementing themselves as key players in the travel industry.
However, the pandemic has changed the travel landscape, with OTA’s facing new challenges such as mass cancellations, booking restrictions, travel rules and travel aversion. This has impacted commercial margins, with OTAs seeing a reduction of up to 30% in profit margins. To manage the change, OTAs are having to adapt and evolve to the global market dynamic.
For OTAs it is beyond offering the best holiday packages, it is about providing personalised discounts, fluid cashback and flexible booking options to win market share post pandemic. This also includes the delivery of optionality, greater security and loyalty schemes in your payments process.
1- Handling post-pandemic pass rates
The uncertainty around travel during the last few years has meant that for many acquirers, the travel industry is now perceived higher risk. This has had an impact on the pass rate of travel transactions with payments unnecessarily failing, creating a poor user experience for OTAs and tension for customers who are trying to spend.
Holidays for many consumers are one of the biggest purchases they make in a year. Being a very personal and organisation intensive decision, which is often made well in advance of the actual experience, holiday-makers need reassurance and want a smooth, trusted payment experience that is flexible to their needs. Any friction or sign of disruption, such as a failed payment, may result in the consumer taking their business elsewhere, despite being in the position to purchase. In scenarios like this, pass rates can be a real barrier against OTAs generating digital customer loyalty.
Often real-time analysis of your payment data can show trends in what is leading to an OTAs payment failures, yet with fragmented back-end systems this can be a difficult task to deliver on accurately. With a full view of your payment performance data, through tools such as payment orchestration, you can assess the causes of the disrupted payment experience and rectify in real-time.
Often, solutions such as intelligent routing can enable you to manage load balancing, or a multi-acquirer strategy with greater resilience, reducing the chance of a failed payment. Further for cross border transactions, which are often commonplace in the travel sector, you have the option to integrate with local payment methods, manage currency conversion and accommodate local payment regulations.
2- Increasing customer optionality and accessibility at the checkout
A key pillar in the success of OTAs is the amount of choice and variety they offer their customers. Displaying a wide range of holidays from around the world in one central location creates a convenient experience for the user. Having all these choices displayed in one place under a recognisable brand has a huge impact in reducing unease in potential customers too. With travel cart abandonment rates being 85% on desktop and 91% on mobile (Salescycle, 2022) it is essential for an OTA to reduce uncertainty by playing to its strength of choice and variety.
Yet payment optionality has been neglected in many OTAs payment strategy, meaning new payment methods or preferred payment options are not available at the checkout. A payment orchestrator such as BR-DGE provides over 300 alternative payment methods through a single API integration, giving an OTA the ability to offer a wide range of payment methods to ensure their entire customer journey offers choice and not just for the products they offer.
3- Navigating narrow margins
Research shows that despite the climate, digital spending on travel is on the rise, which offers a wealth of opportunity to maximise digital sales, however competition is fierce.
Where there are tight margins and in a post-Covid recovery climate, payments optimisation is important for managing your profitability. With greater risk in the sector, access to a wealth of partners, choice and flexibility ensures you have greater commercial leverage.
Just as you would look at solutions to mitigate failed payments or reduce cart abandonment, OTAs also need to look at other places within the payment experience you can minimise cost and maximise the experience.
With a payment orchestration platform, like BR-DGE, you have the power of intelligent routing at your fingertips. This enables you to route transactions based on a wide range of criteria such as volume, currency, country and more. Payment orchestration gives you the flexibility to negotiate and leverage your wider network of payment providers to secure the best deal for your processes.
At BR-DGE we are proud to be working with Online Travel Agents like Travel Counsellors and are working on innovative workflows to enable BINN routing solutions, passing on corporate card surcharges, all within a streamlined payment experience.
4- Building a resilient refund process
Over the last couple of years, Online Travel Agents have had to adapt and evolve your offer and experience, alongside your travel products. This includes building a comprehensive package of flexibility when it comes to travel bookings, such as flexi-dates and voucher refund processes.
Fragmented systems during the pandemic struggled to cope with the vast change and immediate demand for compensation. However, as travel rebounds, you are now able to reflect and refresh your processes, to build greater resilience and a frictionless compensation process for your customers.
A slow and clunky refund process often results in poor brand reputation and has an impact on repeat business and securing new customers in the longer run, especially when a cancellation or problem with a holiday is often a very personal and treasured experience.
Designing a resilient payment process not only aids margin management, but wider brand reputation. Payment orchestration platforms, like BR-DGE, enable you to consolidate online transactions to simplify the customer service experience. Your team can use the reporting data to locate and address each individual transaction in one single dashboard, in real-time.
With improved speed and agility, you can ensure your customers remain satisfied with the experience and that your brand credibility stays intact.
5- Delivering dynamic loyalty schemes
Originally loyalty schemes within travel were mainly utilised by business travellers, as many of these schemes required huge amounts of travelling to earn worthwhile awards and benefits. Loyalty schemes were often an offline experience, secured post checkout and utilised through physical cards or posted vouchers. However, with greater digital flexibility and system development, holiday-makers are looking for greater discounts and rewards in-built in the online booking experience.
For a loyalty scheme to be successful in travel it must offer personalised rewards with the consumer getting choice, instant availability and a reliable experience (Accenture , 2022). By offering these three key points loyalty schemes will result in repeat business for OTAs and understanding how to embed this into your online offering is critical.
In 2022 loyalty schemes are considered a standard component of the ecommerce experience. These practices to encourage repeat business, improve the customer experience and often promote higher basket values. The migration from offline to online offering can often be challenging, but with tools such as payment orchestration, you can build your loyalty scheme into the checkout experience, ensuring the end-to-end payment experience is seamless and promote digital loyalty.
Could payment orchestration solve your travel payment pain-point?
Much of the success of OTAs is down to the choice they provide, whether it is in destinations, holiday type or the payment method at the checkout. In a turbulent and challenging climate, providing a smooth, customer-focused experience with a relevant array of checkout choices is crucial to commercial success.
Payment orchestration gives you a real choice when it comes to payments, from greater speed of innovation for loyalty schemes and payment methods, through to technology resilience and margin management with a robust back-end portal.
Payment orchestration gives you and your Online Travel Agency, all the tools you need to create a compelling, digital, end-to-end experience.
If you would like more information about how BR-DGE can support you in the travel sector get in touch with us today!
