David Doctor: The investment boom from travel companies into payments and fintech


Writing for Payment Expert, David Doctor, Executive Vice President of Payments at Amadeus describes the growing relationship between fintech and the travel industry. 

Despite the overall market downturn in fintech stocks, there is growing evidence of an investment boom from travel companies into payments and fintech. Following the impact of COVID-19, it is clear that many travel companies are placing bets on a significant travel recovery, with many investing in payments and fintech now so they can offer the best possible experience to returning travellers.

For instance, one can look to travel retailers such as Hopper, which has achieved extraordinary business results with its pivot to design and sell fintech services. The company’s flight price freeze product is now taken up by around 25% of its customers – a very successful ancillary service. 

When we asked 70 senior leaders from airlines and travel sellers about their fintech investment priorities for 2022, we found that 70% of travel businesses are investing broadly across their companies this year to capture an expected rebound in travel, with fintech and payments viewed as a high priority by nine out of 10 respondents. So, let’s take a look at what areas of payments and fintech travel companies are investing in this year. 

Tackling the chargeback challenge

Chargeback management has become an increasingly large burden for the travel industry, leaving many companies asking how they can tackle the dispute resolution process. Put simply, a chargeback is the formal process initiated when a cardholder disputes a transaction – often leading to the cardholder being reimbursed directly by their issuing bank that obtains the funds from the merchant’s acquirer. Managing this particular challenge was identified as a top priority for 31% of travel companies this year. 

Chargebacks can be seen as a bit like a game of tennis – the initial chargeback is submitted and then a process of back-and-forth provision of documents and evidence ensues, until the final decision is taken to reimburse the consumer or not. As chargeback levels remain elevated, it’s important the industry is able to better automate the dispute resolution process. The good news is that they can be managed smoothly if the right processes are put in place. 

One potential way the industry could rethink chargebacks is through automation powered by improved information visibility. Often the key to swiftly concluding a dispute is finding the right answers to the right questions – did the passenger actually fly? Was the flight delayed? Did the passengers identify themselves at various touchpoints? By making identity, booking and payments information more visible via APIs, there’s an opportunity to automate and significantly improve this increasingly important back-office function. 

Buy Now Pay Later: the new standard in travel?

Offering travellers the option to pay for travel in a series of instalments based on a rapid credit assessment is quickly becoming the norm in travel. Buy Now Pay Later (BNPL) is already a widely accepted payment method in other sectors, with data showing that by 2024 around 10% of all e-Commerce sales in the US will be made using BNPL, up 300% since 2018. According to the study, it is a top priority for 36% of travel companies this year. 

For travel companies, BNPL helps to improve the traveller’s booking and payment experience whilst increasing conversion and boosting ancillary revenue opportunities. According to Amadeus’ Pay When You Fly research, 49% of 5,000 travellers surveyed said they would be more likely to book an airline ancillary service, and 68% said they would be likely to spend more overall on their trip, if BNPL was offered. As we continue through 2022, BNPL looks set to become a frequently offered payment option alongside cards and other major alternative methods.  

Multi-currency pricing: the quick win for digital experience

A priority for around a third of travel companies this year is the pricing of services in multiple currencies. Today, if travellers book a flight or travel package using a non-native website, it’s highly likely they are presented with the price in a foreign currency that’s unfamiliar to them. This can lead to anxiety, basket abandonment and also forces travellers to navigate away from the page while they use sites like XE.com to manually convert the price.

Multi-currency pricing, whereby the traveller can select their preferred currency to settle the payment from a drop-down menu on the airline’s website, also allows the travel company to assume greater control over the foreign exchange transactions to which its customers are exposed.  

For example, rather than a financial intermediary completing an FX transaction and adding its own conversion spread (which is often only apparent to the traveller when they receive their bank statement), the travel company sets these parameters instead. This dramatically improves the transparency and convenience of the traveller’s shopping experience and can be a differentiator between providers.

As the travel industry continues its digital transformation, the ability to remove payment friction, enhance merchandising and improve the traveller experience is a high priority. In addition to rethinking today’s processes, travel companies are investing now to add new fintech capabilities that improve the traveller experience and capture the ongoing rebound in travel spend. Ultimately, having best-in-class payment and fintech capabilities is essential to providing an excellent traveller experience, and is the future that all travel companies should be investing in.