There’s a long line behind you and your food is ready, the lady behind the counter gestures at a tiny hand written sign next to the till apologetically.
"Sorry we only accept cash.”
Embarrassment, annoyance, frustration.
It’s an experience that’s not nearly as common as it used to be, in fact it happens so rarely now it catches you unaware and leaves you with an unpleasant taste in your mouth.
Aren’t we past this now as a society? Haven’t we moved on from cash?
Not quite, but we’re certainly on our way.
We’re seeing an ever-increasing demand for frictionless payment methods across Asia-Pacific, driven largely by China, a global leader when it comes to super-apps. To give you an idea, an astounding 85% of paymentsmade in China in 2019 were made through mobile platforms.
And the rest of the world is catching up. Australia already ranks 10thin the global ecommerce market size in 2019. More and more Australians are looking to forgo the more traditional payments processes in favour of smartphone apps, eWallets and frictionless mobile platforms.
Looking at these statistics it’s not hard to see a future in which we become a truly cashless society.
The Rise to Cashless
Before the rise of mobile technologies, paying by cash guaranteed you reliability. Cash couldn’t bounce back, cash couldn’t fail because of a connection issue and cash was immediate, no need to wait a few business days for funds to transfer.
But with the advances that have been made in creating frictionless online payments, consumers know that they will not be left high and dry. The uncertainty and inconveniences of card payments and online transfers are being answered with real time payment solutions that are not only secure but also easy to use.
And payments in the travel industry are certainly no exception.
The vast majority of us are now booking holidays online – 81% of us, according to a survey taken in 2018. This percentage is only set to rise further as a higher adoption rate of eWallets is anticipated to reach 50% of payments across APAC by 2021.
What Does This Mean for Tour Operators and Booking Agents?
It’s not just the booking of holidays that’s taking place online either. Holidaymakers are increasingly booking experiences, accommodation and transport all from the comfort of their own home before they set off. The result? Less cash is being taken on holiday.
The onus is now on the agents to provide a seamless, frictionless experience to all users to ensure that valuable business is not lured elsewhere by challenger competitors who are more willing to adapt.
The good news is the opportunities available to innovate in the payments space are substantial, and the rewards will be as well.
By taking steps to integrate their businesses with online payment methods, travel companies will be able to increase their share of outbound tourist bookings. And with outbound APAC tourism growing at 7 percent each year, according to Accenture research, the profits to be made are a very enticing incentive to get onboard.
Making Friction-less a Key Aim
So how exactly is adopting these new payment strategies going to equate to new business?
A key advantage of some of the new frictionless payments strategies is the ease of use, leading to a better customer experience. Happier customers mean fewer customers abandoning the checkout process when they encounter problems.
The streamlined nature of these newer payment methods also means less manual input, meaning customers can transact in a quicker and more efficient manner, leading to greater customer retention.
Another consideration to take into account is the potential for greater operational efficiency. By automating the collection of pre-paid purchases, travel businesses can reduce or even eliminate no-show/late cancellation fees.
And customers’ trust in companies will grow with the knowledge their payment information is secured and the risk of monetary and identity theft is reduced.
Keeping a finger on the pulse
The future will bring evolution and fluctuation, and companies in the tourism industry need to be keeping a finger on the pulse to stay one step ahead.
We might not quite have reached a completely cashless state when it comes to payments in the tourism industry, but we are well on our way.
As we begin to see huge spikes in the use of mobile payments and eWallets, travel companies have an unprecedented opportunity to start delivering their customers friction-less payment experiences.
Over the coming months, we’re excited to share more of the changes — both here at Mint, and in what customers can start to expect from the world of payments.