Mobile Payments May Be Taking Flight

The idea of mobile payments being up in the air could be taking on a whole new meaning.

Many airlines appear to want to enable travelers to pay by phone on the plane.

The majority (71%) of airlines believes the future of airline payments is in mobile, according to a new survey, and more than a third (36%) of them plan to accept mobile payments on-board flights within the next two years.

The number of airlines accepting mobile payments increased from 10% in 2012 to 25% last year, based on the survey of 68 traditional and low cost global airline carriers by WorldPay.

Airlines already provide a number of services by mobile and more appear to be on the way. As any frequent flyer knows, most airlines have mobile check-in and the survey found that 71% expect to within two years.

The reasons pushing mobile payments along for airlines are somewhat split, with half (50%) seeing it as a way to keep up with competitors and almost as many (45%) as a way to increase revenue.

Airlines expect that extra revenue to come from a number of places within the next two years:

  • 55% -- Paying for a flight
  • 55% -- Ancillary sales
  • 47% -- Buying an upgrade
  • 42% -- Buying baggage allowance
  • 28% -- Paying for onward travel
  • 26% -- Buying inflight good and drink to consumer on board
  • 20% -- Buying inflight duty free goods

Mobile also is overtaking self-service kiosks as an investment priority, according to the survey, with almost a third focused more on mobile devices. More than a third (40%) of airlines say kiosks will be less important in the future. The current investment priorities:

  • 31% -- Investing equally in kiosk and mobile services
  • 29% -- Investing more effort in mobile devices
  • 29% -- Investing more effort in developing kiosk services
  • 24% -- Don’t know

Mobile payments also present airlines with a broad range of challenges, with the risk of fraud at the top of the list. Here’s the complete list of challenges, based on the Alternative Payment and Distribution Landscape report:

  • 65% -- Risk of fraud
  • 65% -- Integration with current systems and processes
  • 63% -- Diversity of mobile platforms and operating systems
  • 51% -- Payment security
  • 44% -- Data security
  • 37% -- Availability of resources for implementation
  • 30% -- Cost to implement
  • 23% -- Insufficient evidence for ROI
  • 12% - Selling in to the business internally
  • 7% -- Less visibility due to outsourcing/partnering
  • 7% -- Customer understanding and/or enabled equipment

The biggest behavior modification here may be changing the flight announcements to turn off and put away a phone to take them out and power them up.

 

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