How can travel operators build a fast and secure Pay by bank experience?

Simple, secure, fast. This is what your customers want when they are booking a flight, hotel or holiday on your platform.

But in reality, this isn’t always the case. Especially when they pay with a debit or credit card, or digital wallet. Using these payment methods can make your customers' experience of booking their dream trip stressful. And it can be stressful at the best of times.

With higher than average cart abandonment rates in travel (81%) compared to online retail (68%), it’s important your customer’s checkout experience is the smoothest it can be.

The solution? Pay by bank

Pay by bank is a payment method that allows shoppers to pay for things directly from their bank account (on your phone or desktop), rather than using a credit or debit card or digital wallet. It’s powered by open banking, so is completely free of card payment rails.

More and more travel operators are exploring Pay by bank because of the customer experience it provides. Couple this with the current rise in global eCommerce sales that are expected to grow even more over the next 3 years by 26% and the fact that the amount of mobile commerce sales in 2024 will have more than quadrupled since 2017, it’s clear travel operators who are not looking at Pay by bank risk getting left behind.

A solution for travel operators with their customers in mind

With Pay by bank, your customers will benefit from:

• A secure and trustworthy payment experience with SCA natively built in

• An end-to-end payment journey that can take as little as 30 seconds to complete

• A simple payment experience

And your business will benefit from:

• Significant operational cost savings

• Building resilience into your payments stack by adding a payment method that doesn't rely on a card, associated network or scheme

• High conversion and payment acceptance rates

How do you choose the right Pay by bank provider?

So now you know why Pay by bank is a great option for travel operators, how do you choose the right Pay by bank provider? This is key.

The right provider will be the difference between a safe, quick and user-friendly payment experience — and simply another payment method that causes headaches at the checkout.

They will offer lots of insights, using their vast understanding of how to optimise your new payment method’s user experience.

And that user experience is what leads to sustained adoption. The simpler, more secure, and faster it is, the more likely your customers are to select and keep using it.

Take a look below at three things to look out for when assessing Pay by bank providers, plus some key questions you should ask them.

1. A high-converting payment experience

A high-converting payment experience for travel operators is essential as it means capturing more sales.

So with 87% of retail consumers frustrated by online payment experiences and almost three in every four holidaymakers (73%) in a recent YouGov survey saying they had experienced problems and frustrations during the booking process, how do you achieve this?

Tried and tested UX support

UX is important. Both the mobile and web payment experience has to be fully optimised so your customer associates it with the three key words mentioned at the beginning of this article: simple, secure, fast.

You should look out for a Pay by bank provider that delivers UX/UI recommendations based on extensive user testing and real-life experiences with operators in your industry. Equally, one that will work with you to boost the uptake of Pay by bank, through driving customer adoption and increasing customer engagement. Using data on consumer preferences and behaviour will allow you to tailor your approach to your specific user base and market conditions.

Sales recovery methods to increase payment acceptance rates

When it comes to a high converting payment experience, sales recovery methods are also a vital consideration. We know operators in the travel industry suffer from high cart abandonment rates, which is why here at TrueLayer, we work with you to improve payment acceptance on sales recovery methods to optimise SCA drop offs on cards, or failures on other payment methods. This improves customer sentiment and less cart abandonment equals a boost in sales.

Ask your provider

1. What is a typical conversion rate for use cases like mine?

2. What UX/UI recommendations and support do you provide to increase conversion?

3. How do you help me maximise the adoption of my new payment method?

2. A cost-effective solution

In an industry where margins are tight, yet the customer experience can’t suffer, taking cost out of your business whilst maximising revenue is key to success.

So what should you be looking out for?

Look beyond ‘price per transaction’ in isolation

You don’t want to limit yourself to purely looking at the price per transaction when assessing Pay by bank providers. Why? Because adoption of the solution is so important in allowing you to achieve cost savings that will make a big difference to your bottom line.

It is essential you choose a solution that is capable of winning share of checkout from existing payment methods, whilst processing the payment at a cheaper price point. This means a clear focus on improving the checkout experience for your customer.

Benefit from short and long-term operational cost savings

Aim to get a view of the operational cost savings you will achieve. For example, with TrueLayer’s Pay by bank solution, you can take control of dispute policies and virtually eliminate chargeback fraud, reducing costs and operational overheads. A big win for travel operators as the impact of chargebacks and refund governance is currently largely dictated by the Schemes, which increases settlement risk and complexity.

Instant settlement = improved liquidity

A solution that offers instant settlement, like Pay by bank, will improve your liquidity over time. Instant settlement will give you greater control over cash management and improved cash flow. As open banking adoption grows, your liquidity will improve.

Ask your provider

1. How will you help me take cost out of my business whilst maximising revenue?

2. What share of checkout have your operators been able to achieve and why?

3. How does your solution support operational cost and resource savings?

3. An expert Pay by bank provider

Every Pay by bank provider offers something different. Whether this is the product they provide, the support, the integration options available — the list goes on. Understanding these differences can often be difficult and time consuming.

What is easier to grasp is whether the provider is experienced delivering open banking solutions to operators in your industry.

Driving conversion for travel operators

Why is travel industry experience so important? Because it puts said provider in a better position to drive higher conversion rates, which in turn builds brand loyalty with your customer base by offering a simpler, easier, faster and more secure way to pay.

Nicola Bettari’s (Fintech and Payment Director at lastminute.com) comments about TrueLayer underline this, demonstrating the importance of the need to build a collaborative relationship with your Pay by bank provider.

“

TrueLayer has established itself as a key player in our long-term payment vision...What I liked the most from working with the TrueLayer team is the competency they possess and their forward-thinking. They acknowledge and prioritise what is relevant for us in terms of our business goals.

Nicola Bettari, Lastminute.com

Since launching with TrueLayer’s Pay by bank solution, LastMinute has benefited from a 20% increase in AOV (average order value), increased resilience into their payments stack which was evident during the recent CrowdStrike outage (where Pay by bank reduced losses associated with the inability to collect card payments) and increased conversion rates.

Ask your provider

1. What benefits can open banking offer operators in our industry?

2. What OTA's or airlines do you work with?

3. What new products or features are on your product roadmap?

Let’s speak about Pay by bank

It’s clear that Pay by bank adoption is growing amongst travel operators. It’s the future of booking a flight, hotel, excursion — even a holiday.

Take advantage of this by booking a demo with one of TrueLayer’s Pay by bank experts today.