by Anth Hynes
Missing an opportunity by letting B2B payments fall through the cracks
The travel industry is missing a trick by letting B2B payments fall through the cracks. It’s time to talk about a missed opportunity when it comes to suppliers thinking about B2B travel payments. Specifically, that agents and airlines should be aligning their B2B payment strategies to support the focus on retailing and the necessity to adapt to the “merchant model.” Read further to hear my thoughts on the subject.
How has technology changed payments in the travel industry?
Over the years, technology has changed the face of travel in many ways, including:
- The customer buying and payment experience has changed
- With the rise of online retailing, global competition has increased
- Travel companies are able to better understand their customers and enhance the end-to-end traveler journey
As the travel distribution landscape has changed, so too has the business model of the travel suppliers working within it. Over the years, we’ve noticed that both airlines and travel agencies have a keen focus on adopting the retailing model to give their customers the best possible experience (and rightly so), including shoring up their B2C payments processes. However, only focusing on this aspect of how they do payments, ends up leaving a gap in their business strategy when it comes to how they transact with each other. For travel agents, this means having a solid strategy on how they pay suppliers once they have received payment from customers. And for airlines, this means not only considering the best way to accept payment from their customers, but also from their agents too. Not thinking about this aspect of the way they do payments, ultimately has a negative impact on the end customer they’re trying to serve in the first place.
Use of the "merchant model" to adapt to new payments technology
To successfully operate the retailing model, travel agencies have identified the need to control the payment transaction. This means adopting the “merchant model” so agents can still deliver the customer experience that allows them to remain competitive and retain customers.
Some airlines have already identified the impact to their business and customers’ experience from the way they receive B2B payments; and are now linking payments with their distribution strategy. However, this needs to be considered more widely across the travel industry.
When both parties begin to appreciate the impact from the missed opportunity of working together, they can begin to have constructive commercial discussions and ultimately agree on a payment strategy that benefits all parties in the travel value chain. And now, as the travel industry begins to recover from various government-imposed travel restrictions associated with COVID-19, it has never been more important to have these conversations.
How to move the travel industry forward during times of change
WEX is committed to working with airlines, travel agencies and other stakeholders to provide travel payment solutions that benefit all participants in the value chain. We see this missed opportunity as a very important topic and therefore would like to keep the conversation going.
Let's continue discussing various angles on this topic, expanding on the limitations of the current B2B travel landscape, diving deeper into how airlines and agents can work together to benefit both parties, and ultimately how they can leverage payments to optimize their customer’s experience with the "merchant model."
Learn more about how WEX payment solutions can be tailored to your travel business, so you can accelerate and streamline operations while creating lasting growth and success for your organization.