The direction of travel is clear: people in APAC are going cashless. As mobile payments and eWallets replace traditional card payments across the region, travel companies must move fast to provide the frictionless payment experiences their customers demand.

The global drive towards truly frictionless payments is gaining pace. And it’s being fuelled by developments in Asia. Powered by the rise and rise of its growing array of “super-apps”, China leads the way: over 85 percent of payments there will be made via mobile platforms in 2019 – 94 percent of them processed by WeChat and Alipay.1

Other APAC markets aren’t far behind. By 2021, over 50 percent of payments across the region will be made using eWallets. And new players are jumping in to seize market share. Take Grab, for example. Its meteoric rise to south east Asian super-app status has already taken it into new markets like insurance and food delivery. Now hotel booking, trip planning and ticket purchasing are on its shopping list for 2019.

Breakneck innovation in frictionless payments

The writing is very clearly on the wall for the global travel industry. Today, it’s spelled out in QR-code. Soon it’ll be biometric, as rapid advances in mobile technology, facial recognition and security open the door to breakneck innovation in this space.

With cards and cash transitioning unstoppably to frictionless payments, the travel industry must move fast to provide its customers with alternative payment experiences. Travel companies that don’t, risk rapidly losing relevance and ceding market share to disruptive new players. But there are huge opportunities here for those that do.

New frictionless payments strategies will boost revenues through increased bookings, with fewer customers abandoning the checkout process midway. Customer retention will improve because people will be able to complete their bookings with fewer steps and using familiar payment methods.

The benefits will go further. Operational efficiency will be enhanced by automating collection of pre-paid purchases and no-show/late cancellation fees. And with customers’ payment information secured, and better authentication methods like biometrics in place, companies will have a powerful new way to reduce fraud and drive up trust.

Getting in on the outbound trend

Provided they’re equipped to accept the frictionless payment methods that their customers use every day (in their native currencies), travel companies will be able to increase their share of outbound tourist bookings. And that’s as essential for companies based outside the region as it is for local APAC players.

That’s because of the rapid growth of Asian travellers, both within the region and outside it, with Europe and America the most popular destinations. According to Accenture research, we’re now seeing outbound APAC tourism growing at 7 percent each year. China is the top spender in international tourism, while India has the world’s fourth-largest domestic traveller population.

For these travellers, frictionless is fast becoming a common currency. Many of China’s 200 million outbound travellers have never had a credit card—and some of those that do, have stopped using them. Meanwhile, usage of eWallets is experiencing extraordinary growth in India. Since the country’s demonetisation policy was introduced in 2016, there’s been a 405 percent increase in eWallet usage. Further growth of 500 percent is predicted by 2023.

Adopting frictionless capabilities

These trends point to a golden opportunity for travel companies that can shift to accommodate frictionless payments. So it was no surprise that APAC’s key role in transforming the global payments landscape was a headline theme at last month’s Skift Forum Asia 2019.

While I was there, I shared a great panel session with Laura Miller, CIO of InterContinental Hotels Group plc (IHG). We shared our experiences of working together in the Chinese market to drive forward her company’s adoption of frictionless payments capabilities.

During the session, Laura highlighted the value we brought to the table: “In this collaboration with IHG, Accenture has been great in helping us lead the way in the payments industry in China, enabling us to implement Alipay and WeChat Pay in our various channels.”

 Keeping an eye on the future

At the current pivotal moment, these attributes are all the more vital. Mobile payments are outgrowing APAC and going global, and the travel industry must keep pace. In such a fast-moving area, it’s imperative to keep looking ahead and asking what’s next. With countless alternative payments solutions out there, which ones will come out on top? Where should you be investing for the future? What are the security implications?

This last question is key. In 2017, fraud against airlines accounted for 49 percent of all attacks on merchants.2 Frictionless presents huge opportunities that can’t be ignored. But it also exposes companies to major risks – and cross-border payments exacerbate the challenge. In these scenarios, transactions are 6.6 times more likely to be rejected as fraudulent, device spoofing becomes 1.6 times more likely, and identity spoofing 1.7 times more likely.

Zero fraud is not a realistic option. Companies have to find a balance between minimising losses and providing the best possible, most seamless user experience. But there’s good news here: anti-fraud tools are constantly evolving. Biometric recognition, device fingerprinting and other forms of authentication are becoming increasingly sophisticated.

Frictionless payments are the future for global travel. And APAC is driving the industry towards it. The result? Travel companies across and beyond the region have a great opportunity to get ahead of the curve. Do you agree? I’d love to hear your views. Please leave a comment or get in touch via email.


1How Uber, Instagram And GUESS? Are Driving Platform Payment Innovation

2Ecommerce Payment Fraud Outlook 2017-2020

Mike Tansey

Managing Director

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