Travel companies plan fintech investment boom to capture rebound
Some 80 percent of companies will surpass or match 2019 financial technology investment this year
New Amadeus research shows 80 percent of companies will surpass or match 2019 travel-related financial technology (fintech) investment levels this year.
The company’s ‘Travel fintech investment trends’ report, based on research compiled from more than 70 senior aviation and travel sales leaders, shows that fintech is viewed as a high priority by nine out of 10 respondents with 80 percent of businesses stating that in 2022 they plan to match or go beyond their 2019 investments in the area.
A third of firms plan to match 2019 levels while a significant 50 percent plan to increase investment.
And when questioned more broadly on company-wide investment, 70 percent of participants said they plan on investing through 2022 to capture an expected rebound in travel, with only 30 percent opting for a more conservative strategy.
When asked what is driving fintech investment, respondents’ top objective was to ‘improve the traveller experience’, closely followed by ‘increase revenue through payments’.
Respondents were asked to rank their fintech investment priorities for 2022 from a list of 15 options, revealing two groups of priorities – ‘existing’ and ‘emerging’.
More travel companies expect to invest in ‘existing’ capabilities during 2022 with Alternative Payment Methods (61 percent); Strong Customer Authentication (46 percent) and Fraud (44 percent) ranked as the three top priorities.
However, a second group of ‘emerging’ priorities also scored highly, with Payments in NDC (47 percent); Buy Now Pay Later (36 percent); Multi-Currency Pricing (34 percent) and Chargeback Management (31 percent) completing the top half of the priority list.
Notably, crypto payments were not seen as a priority with only 14 per cent of those surveyed indicating they plan to invest in the capability during 2022.
Amadeus’ Executive Vice-President of Payments, David Doctor, commented: that fintech stands out as an area of the travel business where you can provide new value-added services that bring revenue, whilst also improving the traveller experience.
“That’s why businesses are channelling scarce resources in this direction and Amadeus is investing heavily too. We expect to double the people in our payments team by the end of next year compared to 2021.
“We see our customers rethinking today’s challenges, like how to manage elevated levels of chargebacks. While also looking to the future, travel brands are embracing innovations like Buy Now Pay Later and Multi-Currency Pricing to deliver a more flexible and transparent digital experience.”
Chargebacks, the formal process when a cardholder disputes a payment, have risen dramatically during the pandemic as more travellers have become aware of the option.
According to this study, 70 percent of travel businesses saw a significant increase in chargebacks with 30 percent choosing to increase headcount to manage the additional disputes.
A quarter of firms revealed they have been unable to effectively challenge chargebacks due to the volume increase, raising concerns that the cost of chargeback fraud may have risen since the onset of the pandemic.
Mike Parker-Brown is a UK-trained and qualified journalist and an award-winning travel communicator with more than 30 years experience.
Since 2002, Mike has worked as a freelance writer and PR consultant providing his services to major organisations in Australia and internationally in the tourism, aviation, hospitality, recruitment and export marketing sectors.
