Traveling the world has never been easier, and yet many holidaymakers are still experiencing issues when it comes to paying for stuff overseas. People are looking for simple shopping experiences that include faster payment methods, but have payments evolved fast enough to meet the needs of these savvy travelers?
Digital payments – the new norm
While cash likely will always be king for some people, digital forms of payments are fast becoming the main option travelers tap into. From credit cards to smartphone payments, travelers are surrounded by an ever-expanding choice of payment modes. In fact, e-payments have emerged as the leading payment method in the Asia Pacific region when it comes to e-commerce transactions, according to GlobalData, as governments implement new initiatives to drive their Smart Nation agendas.
The explosion of payment options has concurrently led to increased challenges for the travel industry. Not only must businesses contend with intense competition from new players, they have to consider the increased passenger demands and expectations for integrated and seamless purchase experiences. For travel businesses that want to survive in the new digital economy, integrated new payment options are essential.
Why Cash is still a preferred payment option – even amongst the more digitally inclined
It is clear that travel is a hugely popular activity among Hongkongers. In 2017, people from Hong Kong spent US$25.5 billion on international tourism, up 5.8 percent from the previous year. And it is continuing to grow, with the city’s travel agents reporting that outbound package tour business in the first half of 2018 was up 14.8 percent.
However, despite Hongkongers’ familiarity with digital payments, many still prefer to use cash overseas, partly to avoid paying higher fees incurred by currency conversions, processing and administrative charges. Credit card fraud is another primary concern for travelers and credit card companies. A Phocuswright study found that the classic credit card is by far the most widespread payment method, as it is accepted by 99 percent of airlines for direct bookings – but the risk of fraud is seen as above average at 27 percent.
As payments evolve, companies need to ensure that they provide a balanced variety of cost-efficient payment options for their customers whilst protecting themselves against fraud and non-payment at the same time.
Towards better cross-border payments
The good news is that payment innovation has evolved to meet the challenges faced by consumers and companies in the travel industry. Businesses are exploring options that help travelers find a more convenient and cost-effective way of getting foreign currency. For example, RHB Bank Singapore launched a digital multi-currency card that allows customers to make purchases in local currency when overseas. The RHB TravelFX strives to revolutionize the way people exchange foreign currencies, by providing competitive rates and convenience.
Multi-currency cards are a safe and smart way to carry travel money as travelers can have access to different currencies via the app – they can enjoy traveling without physical cash. The added layer of security – which allows customers to lock the card when not in use or if they lose the card – also solves a common pain point, delivering an enhanced and secure traveling experience.
Recently, WeChat Pay HK and China UnionPay teamed up to provide mobile payment convenience to HK-China cross-border commuters. With this partnership, WeChat Pay HK and its range of WeChat app vendors will provide Hong Kong users with a range of services while they visit Mainland China; while vendors including DiDi, Meituan.com will join WeChat Pay HK on the platform. WeChat Pay will also provide Hong Kong users with exchange rate quotes and automatic exchange services, streamlining the payments experience for travelers.
It is still early days but we’re starting to see more and more innovations in the area of travel and cross-border payments. And while many businesses have awoken to realize they need to be part of the ecosystem and the accelerating digital payments, there’s still much more that has not been explored. Ultimately, this requires a concerted effort among key players in the payments ecosystem to help drive areas such as automation and security so we can make travel a much easier and enjoyable experience for all.
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