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Mobile Payments May Be Taking Flight
by Chuck Martin, Monday, March 31, 2014 10:01 AM
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.