2018 was an incredibly busy year for CellPoint Mobile; we’ve expanded our mobile and digital solutions across industries, countries and markets while maintaining our core focus on travel, transportation and payments. It’s been great to see positive results across all our sales teams from those serving airlines in Latin America, to those focused on the US and UK rail sectors, to our payments experts in Europe, Africa, the Middle East and Asia-Pacific. In fact, what stood out most in 2018 was the global growth of alternative payment methods and the key role played by payment service providers in facilitating travel commerce online, in-app and across borders.
To highlight one example, more airlines, rail operators, buses, taxis, and cruise lines outside China now accept Alipay – China’s leading mobile wallet – as a payment method. So much so that in 2018 we implemented Alipay for Ethiopian Airlines as part of an ongoing partnership with the African carrier. Alipay has become a strategic priority for travel merchants and transportation operators that serve – or want to serve – growing volumes of business and leisure travelers coming from China.
But there are nearly a thousand alternative payment methods (APMs) worldwide – not just global wallets like Alipay and Apple Pay – and these APMs continue to grow across different countries and markets. Looking ahead to 2019, travel merchants will have to choose which payment options to support to compete across borders and in new markets – and they will need partners to help them do that. Our role as technology partners is not to change our customers’ fundamental product, but to make it as easy as possible for their customers to do business with them, and to make the sales process as cost-effective and efficient as possible for their travel or transportation business.
Productize, Don’t Projectize
I’m convinced that payments strategies in 2019 will be driven by bottom-line necessity. Whenever technology investments are done poorly, they bite into future revenue targets and have a long-term impact on the bottom line.
Instead, travel merchants must view every initiative they undertake on the technology side from a revenue perspective. Quick-to-market booking and payment solutions that streamline the path to purchase will have the most positive impact on revenue. Purchasing freezes to accommodate tech implementations are unacceptable; If a solution can’t get to market in weeks or few months at most, then the travel merchant is leaving money on the table.
That’s why we’re passionate about helping travel merchants build a digital and mobile foundation the right way – the flexible, scalable and cost-effective way. Rather than seeing payments as a cost center, travel merchants in 2019 will use payments to drive profits by moving in a direction that is decidedly mobile-first, multi-payment and multi-PSP.
The immediate objectives of airlines and other travel merchants are to cut costs and increase conversions in all channels. The shift to a mobile-first approach simply means prioritizing the channel with the fewest costs and highest return. When bus and train operators accept popular mobile wallets as payment methods, for example, they achieve multiple objectives at once: cut down on lines at the fare counter or kiosk, reduce physical ticketing costs, and improve the passenger experience by making everyday transactions more seamless.
Likewise, airlines can cut down on GDS fees and increase direct channel conversions simply by optimizing their payment mix to include mobile payment methods. Even if mobile solutions don’t eliminate legacy ticketing and payment costs, they help cut costs significantly while building for the future, and travel merchants in 2019 will continue to prioritize mobile-first solutions for these reasons.
The growth of alternative payment methods is both a challenge and an opportunity and will increasingly require multi-payment strategies. What is the right payment mix for an airline or other travel merchant to offer? The multi-payment approach allows merchants to flexibly choose which payment methods to support as business needs evolve and they enter new markets.
The partnership we established this year with UATP, the world’s leading airline payment network, provides member airlines with immediate access to Apple Pay, one of the world’s most popular payment methods, and other alternative payment methods (APMs) favored by travelers in different geographies. This is crucial as more than 22% of all global air travel bookings are made on a mobile device, including up to 80% of last-minute bookings. Needless to say, this isn’t going to change in 2019 and I expect more travel merchants to take a multi-payment approach in the next few years.
The multi-PSP approach is about airlines ‘disentangling’ themselves from traditional vendor arrangements and building more flexible technology partnerships that can better address their end-to-end digital needs. Through our partnership with UATP, for example, airlines in their network benefit through a reduction in both development costs and implementation times, and increased direct-channel revenues from the best-in-class mobile payment methods their passengers expect and enjoy using.
It can take months or even years for travel merchants to integrate new payment methods as their payment service provider (PSP) may have other priorities in the queue or simply can’t do the integration. Achieving a multi-payment strategy will require a multi-PSP approach where new partners, such as CellPoint Mobile, can quickly address business cases that may not be a priority for the merchant’s existing PSP but are business-critical for the airline/travel merchant themselves.
Happy New Year 2019
I’m so proud of what CellPoint Mobile has been able to achieve in 2018, from our first APM integration with a new airline partner (Ethiopian Airlines) to working with hospitality brands such as Runtriz and MusicPlanet Live. Other partnerships we established or expanded this year included Sunrise Airways, miRide, Malindo Air and PAL. As always, our goal remains to help our partners lower the residual costs for everything they do on their digital channels by providing a “clean” platform they can plug into their existing systems and data.
In 2019, travel technology investments and specifically mobile solutions will be driven by core business needs – cutting costs, growing revenue – and that’s what our solutions are built for.
Cheers to that and to a very successful and profitable 2019!