A fragmented and increasingly complicated payments ecosystem means airlines and outbound agents are struggling to offer customers the solutions they are demanding.
UK travel firms could lose out on as much as £5.45 billion this year from failed payments due to the fragmented nature of the systems they use.
Payments orchestration specialist BR-DGE researched Office for National Statistics data and found 13.4% of travel transactions with airlines and outbound agents fail.
It said the potential losses to the industry equates to over three times the total passenger revenue of Easyjet (£1.49bn) in the first half of this year and nearly double Virgin Atlantic’s pre-pandemic revenue levels in 2019 (£2.9bn).
BR-DGE said systems put under increasing pressure by “massive growth” in digital payments, “present a considerable challenge to airlines and travel agents”.
Although most UK consumers will contact airlines and agents directly via phone following failed transactions, “this complex process erodes travel providers’ profit margins and creates friction across the customer experience”, the firm added.
Emily Whalley, travel sales manager at BR-DGE, said:
“As the sector moves into its busy summer trading period, it is clear from the data that failed payment transactions remain a significant challenge for travel retailers and online travel agents.
“Amid the disruption at airports and increasing cancellations of flights, air passengers are increasingly on the lookout for a frictionless and smooth experience from their travel providers.
“The research shows that payments is just another area where the sector has to work harder to make sure all passengers receive a first-class experience.”
BR-DGE believes travel’s legacy payment systems are “ripe for innovation” as businesses integrate a growing number of consumer payment preferences.
The firm’s single API payment orchestration integration offers merchants a broad range of payment options for a more connected ecosystem to support growth and innovation.
Merchants can quickly onboard new payment solutions, as well as partners, to ensure they keep up with evolving payment needs and to minimise failed payments.
BR-DGE also helps merchants identify reasons for payment failure so they can direct customers to optimal payment options to maximise approval.
Whalley added: “There is a massive opportunity here for airlines, travel retailers and online travel agents to provide a high-quality payments experience for their customers.
“This not only reduces overheads for travel sellers but also increases customer satisfaction and loyalty by making the digital payments process seamless.”
BR-DGE is a payment orchestration service for merchants trading online, which channels a world of payment options through a seamless single point of integration, meaning merchants no longer need to pick and choose between one or two payment providers at great cost and administrative burden.