PAYMENTS - "THE NEW AIRLINE DISTRIBUTION COSTS

Airlines, which along with other travel portals are the biggest e-commerce merchants globally, are driving their sales from travel agencies to direct distribution via their own websites. By using e-commerce, airlines save millions in distribution costs, but often then face new and unforeseen payment and fraud costs. 

However, getting paid online more cost-effectively is an area where some smart airlines are making inroads. These airlines are saving huge money by implementing comprehensive global payment strategies that include taking such simple steps as converting more sales by making their checkout pages simpler. 

You might also think that accepting payments can’t be that difficult, since consumers can use credit cards to make purchases at millions of places worldwide. This is true, but you might not know that the credit card limit on many cards in Brazil is just $250. So, an airline serving the fast-growing Brazilian market better know how to get paid for its tickets without a credit card. Many Germans don’t use credit cards, so airlines serving Europe's largest economy must also know how to get paid via Alternative Forms of Payment. An airline, like any other business, won't be profitable if it can't get paid.

Getting more revenue into the company bank account is just one side of the payments equation. The Airline & Travel Payments Summit (ATPS), which I am chairing, will also address the cost side of payments– combating fraud and the cost of credit card acceptance. I want to leave you with one final thought regarding airlines' payment costs: 

Globally airlines are lucky to make a profit margin of 2% in most years, yet credit card acceptance costs are over 2.5% of total airline industry revenues, while fraud represents another over 1% of global airline revenues.

This alone shows why many airlines are starting to implement comprehensive payments strategies. If you want to have your payments-related product or service included in discussions about airline payment strategies, I invite you and your interested colleagues to join me in Toronto on 12 & 13 October 2011 at the Airline & Travel Payments Summit, sponsored by UseMyServices. You can find out more at: http://www.AirlineTravelPayments.com