Putting payments first in the online experiences market

The online travel experiences market is growing rapidly. While offline sales still dominate the industry, intermediated transactions online have seen continued growth over the last five years, becoming a USD14.8bn-strong sector. With online sales set to continue to thrive in the coming years, the race is on for OTAs to get a piece of the action and make their mark within the market. But to be successful in bringing travel experience bookings online, intermediaries need to make sure they’re getting it right when it comes to their B2B payments. Why?

Intermediated payments for travel experiences are complex – here are 5 factors to be aware of:

1. Wide variations in payments capabilities – the experience supplier market is highly fragmented so there’s a lot of variety in payment capabilities, processes, systems and company preferences.
2. Navigating the global value chain – a single transaction may have to comply with rules and regulations around payments and data within and across multiple jurisdictions, which can make the intermediated experience booking process more complex.
3. Consumers’ buying behavior is different – it’s hugely important for travelers to be able to have instant booking and payment confirmations for experiences, especially when booking in- This gives them piece of mind that their purchase has been successful and could contribute to brand loyalty.
4. Security and fraud risks are heightened – because the experiences market is so diverse and fragmented, there’s a higher risk of fraud or supplier defaults. A lack of standardization in payment flows in the intermediated experience chain can also exacerbate these risks.
5. The age-old complexities of payment continue – Alike other types of travel distribution, OTAs selling experiences must continue to deal with general complexities in payments and the costs they can cause; for example, foreign currency conversion.

Only through nailing their B2B payment processes will OTAs be able to provide their customers with the convenience, flexibility, and diverse experience options they want and will increasingly demand. Agencies who pay experience suppliers with WEX VANs can typically offer a wider range of experiences to their customers, while accepting many more payment options from them too. They’re also more likely to be able to offer travelers bundles and simpler pricing – streamlining and enhancing the customer experience.

VANs don’t just benefit end-users; they also unlock value for other parties involved too:

For OTAs – WEX VANs can be accepted by any experience supplier that can accept a Mastercard online, freeing up travel intermediaries to accept a wider range of payment options from end travelers, while making outbound payments with WEX VANs.

The fraud risk is also near zero, thanks to the multiple card controls and unique card numbers that WEX VANs use. In addition, payments processes such as reconciliation are much easier, quicker and in many cases can be automated – freeing up teams to spend their valuable time on more important tasks

For experience suppliers – accepting VANs from intermediaries means suppliers can protect themselves from the risks and costs of accepting many different customer payment types. They’re also able to be paid quickly and safely. This streamlined payment experience can ultimately lead to significant time and cost savings and a hike in sales volumes.

In a recent research report, “Experiences in Travel”, WEX explores the market for experiences, one of the most exciting and fastest growing segments in travel. The report covers market definition, size and growth, dynamics, customer behaviors, and the opportunities for agencies to capitalize. The market for experiences is significantly different to the market for transport and accommodation. Getting B2B payments right is key to bringing travel experience bookings online.

Learn more about how WEX travel payment solutions can be tailored to your business, so you can accelerate and streamline operations while creating lasting growth and success for your organization.