Concerns Regarding Payment Security During Travel Continue to Rise Among Travelers
The global travel industry is grappling with the challenges posed by the rise in payment fraud, particularly when it comes to cross-border transactions and alternative payment methods like Buy Now, Pay Later (BNPL).
According to a recent survey, overall, 64% of respondents believe that payment fraud has been increasing. This concern is particularly acute in Latin America, with Brazil reporting that 89% of respondents have been victims of payment fraud.
Despite these concerns, BNPL programs are gaining popularity in the region, with more than a third of airlines operating in Latin America investing in installment payment capabilities. Nearly a third of airlines have already implemented BNPL services.
Common concerns surrounding payment security in the travel industry include the high fraud and chargeback risk, complexity of cross-border transactions, consumer distrust, and the challenges posed by emerging alternative payment methods.
To combat these issues, the industry is employing solutions such as advanced fraud detection and prevention technologies, flexible and sophisticated payment infrastructure, stronger identity verification, and strategic partnerships with fintech firms specialising in secure payment gateways and financial security services.
JetBlue, a leading airline, has taken a significant step towards addressing these concerns by becoming the first airline to accept Venmo as a payment option earlier this year. This move reflects a growing trend towards accepting alternative payment methods in the travel industry.
A similar number of airlines offer online bank transfers and pay-by-link, indicating a shift towards accommodating diverse payment preferences and ensuring a seamless customer experience.
Moreover, more than 70% of surveyed global travelers prefer to book with travel companies known for their payment security processes, underscoring the importance of prioritising payment security in the industry.
Nearly 40% of travel executives report that half of their revenues come from international customer payments, highlighting the need for the industry to address the challenges posed by cross-border payments effectively.
Two-thirds of respondents said they would not book with a travel provider lacking adequate payment protection, even if offered a 5% discount, demonstrating a strong consumer demand for security. On average, respondents said it would take a 38% discount to persuade them to book with a provider with poor cybersecurity.
In conclusion, the global travel industry must navigate the heightened fraud environment inherent to cross-border and high-value transactions by investing in AI-powered fraud detection, flexible payment processing solutions, and enhanced identity verification methods while accommodating emerging payment options like BNPL to maintain consumer trust and operational viability.
The travel industry in Latin America, despite concerns about the rising fraud and chargeback risks associated with Buy Now, Pay Later (BNPL) programs, is increasingly adopting these services as a third of airlines in the region have already implemented BNPL services. To maintain consumer trust and operational viability, it's crucial for the global travel industry to invest in advanced fraud detection and prevention technologies, flexible payment infrastructure, and enhanced identity verification methods, while also accommodating emerging payment options like BNPL. This can help improve lifestyle choices for travelers by ensuring a secure and seamless financial transaction process, ultimately leading to a better overall travel experience.
