This year has started to see the travel industry continue to cautiously rebuild, as some nations open borders and others normalize their approach to safe travel measures. And while industry uncertainty still looms, in the world of travel payment, the conversation is shifting from reactive management of refunds and vouchers to focus once again on how payments can drive conversion and an enhanced customer experience. Travel companies are increasingly focused on responding to traveler requirements for convenience, choice, and a fair deal when paying for travel. That being said, here are the predictions for the travel payment trends shaping merchant strategies in 2022.

Buy Now Pay Later in Travel

Buy Now Pay Later (BNPL) is already a major payment method across retail. By carrying out a rapid risk scoring of the customer, a merchant (or its BNPL provider) can extend a line of credit, so the customer pays in several instalments. For travelers, BNPL is a very smooth experience that’s quicker and easier than filling in a traditional data entry form when paying with a card. Flexible payment by installments is particularly important for travel at the moment because family reunion travel or at least the prospect of it is driving demand and these trips often mean four or more people traveling, which can be expensive.

For travel merchants, the real opportunity is the product upsell. If the traveler has flexible credit, they can potentially afford to make a higher value purchase, or to add more ancillary services. According to a survey among 5,000 travelers, 68% said BNPL would encourage them to spend more than usual on summer travel while 49% said they would be more likely to buy airline ancillary services if BNPL was offered. With this type of upsell potential, every travel merchant should at least consider BNPL options in 2022.

Frictionless Payments

At top travel companies, the UX researchers have done a lot of work to consider the entire traveler journey from booking, to the airport and finally the destination, and everywhere in-between. As an industry, we need to create a great payment experience not just when the traveler is on our website, but also when they’re traveling. Several innovations for travel payment have become available over recent years that can be harnessed to remove friction.

· Tokenization enables merchants to encrypt and securely store customer payment information in their systems for future use.

· Merchant Initiated Transactions mean travelers only need to authenticate once, and subsequent payments can happen invisibly in the background as the merchant can re-use payment information the traveler allows them to store securely.

· Last mile digitization uses methods like QR codes or ‘pay by link’ that are amazing ways to upgrade processes like Chip & Pinto e-Commerce payments, even in traveler-present environments like the hotel reception and airport check-in.

Achieving frictionless payments across the entire traveler journey is a long-term aspiration but the top travel start-ups and big firms have already begun working towards this goal with many of their customers.

Airlines Embrace Multi-Currency Pricing By Making It Part of the Digital Experience

Today, airlines typically price fares in the currency of departure but this isn’t necessarily the currency the traveler is most comfortable with. For example, an American traveler visiting Europe books a flight from London to Portugal, and the price is displayed in GBP, yet the traveler is comfortable with USD. Airlines are increasingly recognizing the importance of making the purchase easier for travelers by pricing flights in multiple currencies on their websites, so travelers have clarity on price without needing to perform a manual conversion using a third-party site.

Even the slightest friction during the buying process can result in lost sales and lower conversion rates. Consumers seek seamless, fast, and transparent shopping experiences and airlines are quickly realizing that by taking greater control of services on their websites they can increase conversion by delivering on this need. According to recent research, 89% of travelers would be more likely to buy from one airline over another if it displayed the fare in their currency of choice, which is why more airlines would be offering multi-currency pricing in 2022. Experts predict carriers to assume greater control over aligning this important service with their broader digital strategy.