How to Transform Your Travel and Tourism Business with Real-Time Payments and Digital Wallets
The travel and tourism industry has faced a plethora of cross-border payment challenges which can hinder their growth and put businesses at risk. These challenges include slow and unreliable payments, an inability to accept multiple currencies, or high transaction costs and unfavourable exchange rates. Post-COVID travel in 2022 was filled with delayed flights, a labour shortage, and customer complaints. Some evident solutions include increased digitisation, automation to reduce manual workload, and greater efficiency for a smooth customer experience for businesses and customers.
Cross-border payments are a critical aspect of the travel and tourism industry, but they can be expensive and slow to settle. This article explores how real-time payment systems and digital wallets can help travel and tourism businesses improve their cross-border payment processes.
Challenges for Travel & Tourism
The travel and tourism industry in emerging markets faces unique challenges when it comes to traditional cross-border payments. High transaction fees, delayed settlement times, and foreign exchange risks are some of the main challenges that businesses face when processing cross-border payments. Transaction fees can be particularly expensive in emerging markets, making it difficult for businesses to operate profitably. Settlement times can also be lengthy, which can cause cash flow problems for businesses. According to a survey by the Association of Corporate Treasurers, 42% of businesses reported that cross-border payment costs were too high, and 36% reported delays in payment settlement (ACCA, 2019). Furthermore, traditional cross-border payment processes can be subject to foreign exchange risks, which can affect business profitability and cash flow as funds get tied up in exchange fees (WorldFirst, 2021).
Additionally, foreign exchange risks can be a significant concern for businesses in emerging markets, as they may not have access to the same level of financial resources as businesses in developed countries. These challenges can hinder the growth of the travel and tourism industry in emerging markets, making it essential for businesses to explore alternative payment methods such as real-time payments and digital wallets to help them overcome these challenges. By adopting these technologies, businesses can streamline their payment processes and offer a more convenient and secure payment experience for their customers, ultimately driving growth in the industry.
Digital savvy businesses may even want to provide travelling employees with prepaid multi-currency corporate cards. This allows for spending limits to be set, no foreign transaction fees or currency exchange fees, just simple spending, both virtually and physically. Discover how your business could benefit our Verto Corporate Cards on your next trip.
The Top 10 Barriers Slowing Your FinTech Business Growth.
A driving force that COVID-19 had on the travel and tourism industry is real-time payments and the expectations for instant receiving of funds, whether it’s to the airline, or from the insurance company. Real-time payment systems enable immediate, 24/7 transfer of funds between bank accounts, reducing transaction times and high costs associated with global payments. According to the World Bank, the global adoption of real-time payment systems has increased from 25 countries in 2011 to over 70 countries in 2020 (World Bank, 2020).
While ensuring businesses and consumers have real-time payment systems which can help to overcome the challenge of slow and unreliable payments, it’s not always a guarantee. Traditional banks with legacy systems can mean delays or payments get held at various touchpoints. Adopting an alternative fintech provider which promises real-time payments, or the use of digital wallets which allow for near-instant transfers, ensure both businesses and travellers get this peace of mind. This means that travel and tourism businesses can receive payments quickly, reducing the risk of late payments or non-payments. In addition, real-time payments can help to reduce the risk of fraud, as the transactions are processed in real-time and can be monitored closely. At Verto, we ensure each and every payment, whether it’s down the road or to the other side of the world allows for greater transparency and real-time tracking through trusted payment networks. Get to know our Pay solution better to see how it could benefit you.
Digital wallets are also becoming increasingly popular in the travel and tourism industry, as they allow customers to make payments easily and securely from their mobile devices. According to a survey by Statista, the global mobile wallet market is expected to grow from $1.4 trillion in 2020 to $2.7 trillion by 2024 (Statista, 2021). In fact, digital wallets were seen as a tool to help boost post-pandemic travel as, in the age of contactless payments and a contactless post-COVID world, a digital solution which gave customers greater convenience and could avoid using credit cards. Digital wallets seemed the solution to truly touchless travel. A report by Capgemini found that the adoption of digital wallets by consumers increased by 12.7% globally in 2020, driven by the COVID-19 pandemic (Capgemini, 2021).
Now, the incentives to use digital wallets stretch beyond convenience into greater safety, flexibility, and for those using multiple currencies without wanting additional fees. By accepting digital wallet payments, businesses can offer a convenient and streamlined payment experience for their customers, which can help to increase customer satisfaction and loyalty. Businesses can get greater control over their finances in multiple currencies, so a flight from London to Sydney with a 24-hour layover in Dubai means seamless transition when paying from pounds to dirhams to dollars. Digital wallets offer a secure and convenient payment method for consumers and businesses, with lower transaction fees and faster transactions compared to traditional payment methods. Our multi-currency wallet allows for more than 50 currencies to be collected, held, and paid out to allow for true financial flexibility. Experience zero transaction fees and easy conversions for streamlined spending at your fingertips.
Considerations for Travel & Tourism
Implementing real-time payment systems and digital wallets can present challenges and risks for travel and tourism businesses. One of the main challenges is regulatory compliance, as businesses must comply with various rules and regulations in each country where they operate. Adoption by consumers can also be a challenge, as some customers may not be familiar with the technology or may prefer to use traditional payment methods.
To mitigate these challenges and risks, travel and tourism businesses should consider the following recommendations when implementing real-time payment systems and digital wallets:
Choose a payment provider with a strong track record in the industry, and ensure that they are compliant with all applicable regulations.
Develop a clear communication strategy to educate customers about the benefits of real-time payment systems and digital wallets, and address any concerns they may have about security or adoption.
Test the system thoroughly before launch to ensure that it is reliable, secure, and user-friendly.
Provide ongoing training and support for staff to ensure that they are familiar with the technology and can provide assistance to customers as needed.
Verto is on hand to address any concerns or queries regarding safer payments for travel and tourism as our cross-border payment solutions prioritise safer, smoother, and lower cost transactions. We ensure compliance in every jurisdiction we operate in, and deliver the utmost security measures so every client feels safe sending and receiving payments via our platform for both their accounts and digital wallets.
Real-time payment systems and digital wallets offer a promising solution for travel and tourism businesses looking to streamline their cross-border payment processes. By adopting these technologies, businesses can reduce costs, improve efficiency, and enhance the customer experience. By carefully considering these recommendations, travel and tourism businesses can successfully implement real-time payment systems and digital wallets, offering a more convenient and secure payment experience for their customers, while also reducing costs and improving their business operations.
Ready to get started? Sign up to our platform today and let’s get your business to the destination of safer, faster, and streamlined cross-border payments.