Latin America and the Caribbean are often considered as a single economic region, but there are as many differences as there are similarities between them. The Caribbean includes not only well-known island paradises like Bermuda, Jamaica and the Virgin Islands, but also the coastal areas of Central and South America – places like the island of Roatán or cities like La Ceiba and Tela on the coast of Honduras, or the country of Trinidad and Tobago off the coast of South America.
Several airlines we work with in the Caribbean, including Sunrise Airways in Haiti and AVA Airways in the Dominican Republic, straddle both regions and have given us an “on the ground” perspective on the challenges and opportunities facing regional carriers.
Given the central role of tourism throughout the Caribbean, a growing number of airlines are adopting retail and ecommerce best practices to provide a seamless and secure shopping experience on their websites and apps, making it easier for their customers to do “the travel basics” such as mobile bookings and seamless payments, both of which are tablestakes.
Mobile Money and Caribbean Travel & Tourism
Most Caribbean islands are heavily dependent on T&T (travel and tourism) and are essentially “pegged” to the economies of their closest trading partners. But many Caribbean countries are also experiencing domestic growth and increased dynamism. Jamaica, for example, has a total population of 2.81 million, with 3.6 million mobile subscriptions and 56% Internet penetration, which indicates a modernizing domestic consumer sector.
Back in 2011, Jamaica-based mobile operator Digicel sold its Honduras and El Salvador operations to Mexico-based América Móvil in exchange for its Claro business in Jamaica. This swap allowed América Móvil to strengthen its dominance in Latin America and Digicel to reinforce its position in the Caribbean – highlighting the strategic differences between the two regions.
In both cases, Digicel and América Móvil have been central in developing retail payment systems for merchants and consumers. In fact, telcos are acting as a payment service provider (PSP) in 56% of Caribbean countries, but they are limited compared to specialized PSPs like CellPoint Mobile (in our case, we focus on the specific payment needs airlines and other travel merchants).
Caribbean Airlines and Travel Merchants
Like other merchants in the Caribbean, airlines need a wide range of merchant services to provide their customers a full, enhanced and secure shopping experience. What are the unique merchant requirements for airlines in the Caribbean?
For starters, these carriers urgently need a direct channel to customers across all phases of the sales cycle. Smartphones and other mobile devices are points of sale that are with customers wherever they go – airlines should be thinking about their direct mobile channel as their main point of sale.
If airlines are serving customers across borders, they also need ongoing support for cross-border payments. Although it sounds simple and obvious, airlines may well lack these requirements if they depend on all-in-one merchant services where booking and payments are just transactional features, rather than avenues for innovation, cost reduction and revenue growth.
Mobile Payment Innovation in the Caribbean
Payment solution providers like CellPoint Mobile are helping airlines in the Caribbean remove obstacles to digital commerce and create pathways to mobile commerce. By building our own global payment “rails” and lowering the cost of payment transactions, CellPoint Mobile is able to connect local merchants in the Caribbean to virtually any bank and payment method in countries and markets where they want to do more business (such as new origins and destinations).
As an example, take a Caribbean airline that serves US destinations – should it be thinking about forms of payment that meet the needs of their Caribbean passenger base, or those that cater to US customers? Apple Pay, for instance, may not (yet) be a relevant form of payment throughout the Caribbean region, but with an estimated 250 million users and a predicted 200% transaction growth for next year, it is already a highly desirable APM to offer US outbound passengers for booking and ancillary-related products in both the web and mobile channels. But why should the airline have to choose between Apple Pay and another APM more widely-used in the Caribbean?
Rather than integrating payment connections one-by-one, more airlines are partnering with PSPs that can provide all the payment connections they need at lower cost per transaction, enable multiple forms of payment, and enhance their sales channels for customers online and across borders. These are our main objectives in the Caribbean region and we look forward to helping airlines implement more flexible and profitable payment strategies.
In October 2018, CellPoint Mobile announced a multi-year agreement with Haiti-based Sunrise Airways to provide new web and mobile-based payment solutions for the regional carrier. This deployment enables the airline to better control its payment method offerings, reduce chargeback rates and increase revenue by incorporating payment capabilities into its ancillary product offerings. Philippe Bayard, President of Sunrise Airways, commented that “CellPoint Mobile’s Velocity payment solution gives us a future-proof platform that allows our airline to better cater to passenger demands as we expand our regional network and begin offering more value-added services.”