Travel and Payments: How Open Banking is Transforming the Travel Industry
The travel industry has no doubt had an unpredictable and challenging journey over the last few years, but as we return to normality, tapping into the wave of fintech innovation is an opportunity for travel operators to boost profits, streamline operations, and gain a competitive edge.
Open banking has rapidly transformed the financial landscape across various sectors, and the travel industry is no exception. It offers a variety of solutions that can revolutionise the way travel businesses operate and interact with customers.
Travel businesses can potentially reduce their payment processing fees by approximately 90% by adopting open banking instead of relying on conventional payment methods.
Why travel companies should integrate with open banking
Integrating with open banking provides travel companies with numerous reasons to modernise their payment infrastructure. This includes the following:
1. Enhanced profitability
- Open banking can reduce transaction costs by eliminating the need for intermediaries in payment processing, resulting in cost savings for travel companies.
- Improved payment completion rates can lead to higher revenue, as customers are more likely to complete bookings and payments with user-friendly bank-based payment methods.
2. Streamlined operations
- Open banking simplifies payment processes by allowing customers to make payments directly from their bank accounts, reducing the complexity of payment systems.
- Integration with open banking can automate reconciliation processes, making it easier for travel businesses to track and manage payments.
3. Global reach
- Open banking facilitates cross-border payments, making it easier for travel companies to expand their services to international customers.
- It allows for real-time currency conversion, enabling customers to make payments in their preferred currency and enhancing the booking experience.
4. Improved customer experience
- Open banking offers a seamless payment experience, as it requires no card details or complex forms, leading to higher customer satisfaction.
- Faster and more reliable payment processes can reduce checkout abandonment rates, resulting in a better overall user experience.
5. Security and fraud prevention
- Open banking relies on secure authentication methods, such as bank app confirmation, which enhances security and reduces the risk of fraudulent transactions.
- The transparency of open banking transactions allows travel companies to verify customer identities and prevent fraudulent activities more effectively.
Background: open banking services
Open banking came into effect in 2018, as part of an EU & UK initiative to modernise payment infrastructure and boost competition in financial services. The initiative enabled a new bank-based payment method in the UK, allowing certain FCA-regulated fintechs to move money instantly between customer and business accounts.
These organisations are often regulated to read and share consumers’ bank account information, with the direct permission of the account holder.
Yaspa is a regulated payments service, with a focus on providing a high-quality bank-based payment channel for forward-thinking businesses of all kinds.
Yaspa makes it easy for companies with basic technical capabilities to start benefitting from the speed, security, and low fees of bank-based payments. We’re also regulated as an Account Information Service, allowing us to provide several truly unique features, detailed below.
Yaspa’s instant cardless payments: problems we solve
Businesses facing similar challenges to you, in sectors as diverse as gaming, investments and utilities, are using Yaspa to:
- Improve payment completion rates
- Reduce payment processing costs
- Make instant refunds to known customers
- Improving operational efficiency and reconciliation
- Prevent fraud
- Manage and mitigate chargebacks
Payments via Yaspa are unlike anything you’ve seen before. You can try one out for yourself by clicking here.
Preventing fraud and combating illegitimate chargebacks
The simplicity of a Yaspa payment is guaranteed by the lack of payment cards, as is a higher level of security. Bank-based payment methods like Yaspa rely on confirmation via your customer’s banking app, removing the security vulnerabilities of passwords or card numbers. This authentication technique also arms you against false chargeback claims, as you know your customer had to approve the payment within their banking apps.
In addition to raising the bar for security, Yaspa payments are designed to make it easier than ever for your customers to pay you - as they require no cards, codes, or typing - just a few quick taps on their mobile device.
Optimised customer journeys help payments convert
Getting customer journeys right is critical. Quick, intuitive and attractive payment experiences lead to improved payment completion, or conversion, rates. Bank-based payment methods have the potential to offer payment journeys of unprecedented simplicity, and Yaspa delivers on this.
In addition to giving your customers a more elegant, simpler payment experience, we’ve built several intuitive tools into our platform to make it easier to accept, reconcile and refund payments.
- Yaspa lets you implement quick bank account verification checks to transact with named customers
- This makes it simpler for you to attribute payments to named customers, streamlining your support, reconciliation and refund processes
- Refunds are better via Yaspa. Not only are they easier as you can pay out directly to named account-holders - they cost you less and settle to your customer’s account instantly
It’s worth emphasising that payments via Yaspa are highly cost-effective. Bank-based payments are cheaper than most formats because only one intermediary (us) is involved in making the transfer of funds.
Ready to give your customers a better way to pay?
If you think you’re ready to modernise your payment processes, or just want to ask us a question, we’ll be more than happy to help you out.
You can talk to us via the live chat on our homepage, or drop us a message whenever you like via the form on this page to receive more information.
This article is a revision of one published in August 2020.