lastminute.com: how Pay by bank led to 20% higher AOV
In the journey to provide a personalised and streamlined travel experience, lastminute.com understands that a checkout experience offering alternative payment methods is invaluable.
lastminute.com is Europe’s travel-tech leader in Dynamic Holiday Packages. Their proprietary technology aggregates millions of possible flight routes and accommodations in real-time to serve their customers’ diverse needs across the entire holiday experience.
“There’s a saying that, when you travel, you travel three times. One is when you book, another when you're traveling, and finally when you start to remember the experiences that you had on your trip. We’re here to help the customer enjoy each one of those phases.”
Nicola Bettari, Fintech and Payments Director
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lastminute.com knows the excitement starts the moment you begin booking your holiday. The booking experience should be as smooth and frictionless as possible, especially at checkout. They partnered with TrueLayer to offer customers a frictionless Pay by bank experience at checkout — underpinned by open banking.
The challenge
Nicola and his team are well aware that, in the travel industry, conversion is king — particularly when it comes to payments. They needed to offer holiday seekers a suite of payment methods that allow customers to book flights, hotels and dynamic packages through lastminute.com instantly.
“For this reason, one of the pillars of our payment strategy is to have a resilient and multilayered payment system with relevant alternative payment methods on offer to our customers contributing to an increased personalised and flexible offering. TrueLayer has established itself as a key player in our long-term payment vision.”
Nicola Bettari, Fintech and Payments Director
lastminute.com were looking for “the right payment method at the right cost,” and they found it through TrueLayer. The partnership is initially launching in the UK with plans to expand across Germany, France, Spain, and Italy.
The solution
TrueLayer provides lastminute.com with a Pay by bank payment option to improve the customer checkout experience. “The vast majority of our customers are EU-based, so open banking sounded really promising to us,” says Nicola. “This is because the European market is still very fragmented. Banks have different offerings and different experiences.”
Pay by bank benefits both the customer and lastminute.com. The customer has a quick and easy way to purchase high-value bookings. lastminute.com invested in Pay by bank because it comes at a lower overall cost compared to other methods, such as card payments.
lastminute.com is also using Pay by bank to help recover payments that would have otherwise led to cart abandonment. “In the past, we have lost customers once they encountered an issue with their card payment. Now, they can pick up the Pay by bank option instead.”
The results
“After just a few weeks of having Pay by bank in our checkout, we’ve seen a 20% increase of our average order value (AOV) compared with other payment methods,” says Nicola.
Customers are increasingly choosing Pay by bank because it lacks some of the limitations of cards. “Customers struggling to make payments because of things like credit card limits or SCA [strong customer authentication] can, with a little guidance, be invited back to checkout, choose their bank, and pay via open banking.”
Open banking and Pay by bank is more than just a cheaper payment option for lastminute.com. Diversifying their payment options has also made their checkout more resilient. This was very evident during the recent CrowdStrike outage.
During the outage, merchants, including travel operators, couldn’t collect card payments, leading to global losses of over £4 billion. In the meantime, TrueLayer merchants had another payment method to lean on — Pay by bank.
Open banking payments are made directly from the payer’s bank to the merchant’s bank with no unnecessary intermediaries such as card infrastructures. “During the outage, we saw people jumping from one payment method to another. We saw a massive spike for Pay by bank that day. This justified adding Pay by bank to boost our resiliency strategy,” explains Nicola.
Working with TrueLayer
“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, Fintech and Payments Director
The integration with TrueLayer was faster than the lastminute.com team expected. And since the launch, they haven’t experienced any bugs. Everything has run smoothly and as expected.
“I also really value the high level of transparency we have experienced working with TrueLayer,” says Nicola. “To me, transparency is the cornerstone for building a long-standing business relationship and this is what we have obtained from working with the TrueLayer team.”