The Need for Innovation in Tourism Payments

For years, businesses in the tourism industry have faced challenges with traditional card payment systems, including high transaction fees, delayed settlements, and increased fraud risks. Recognizing these issues, leading companies are seeking for more efficient and cost-effective solutions to improve customer satisfaction and reduce operational costs.
 

Enter A2A Payments: A Game-Changer in Payments

One effective solution is leveraging high-quality Open Banking services to facilitate direct account-to-account (A2A) payments. This method offers a range of benefits that align perfectly with the goals of tourism businesses. By enabling direct bank payments, A2A transactions eliminate the need for intermediaries, thereby reducing costs and speeding up transaction times.  A2A payments are typically charged as a low fixed fee per transaction, rather than the %-based fees of cards. This makes it particularly advantageous for high-value transactions such as travel or flight bookings, where even small percentage savings can translate into significant amounts.
 

Key Advantages for Tourism Businesses and Customers

Cost Savings: A2A payments are highly cost-efficient compared to traditional card payments, which can consume up to 3% of a business’s total revenue in transaction fees. By shifting to A2A payments, tourism companies can pass these savings on to customers, potentially offering more competitive pricing.

Optional Business Practice: Most merchants charge the same price for customers regardless of payment method and accept that their margin will be lower on some transactions. However, some businesses, like airlines, may choose to add an additional fee for certain payment methods to compensate for higher costs. With A2A payments, businesses have the flexibility to differentiate pricing based on the payment method, potentially offering lower prices for direct bank payments and maintaining higher margins.

Faster Transactions: High-quality Open Banking services ensure near-immediate settlement of payments, enhancing cash flow for businesses and ensuring that customers' transactions are processed swiftly. This quick settlement also eliminates the risk of chargebacks and holdbacks, providing a smoother financial experience for all parties involved.

Enhanced Security: The solution includes built-in Strong Customer Authentication (SCA), which significantly reduces the risk of fraud. This security feature offers peace of mind for both businesses and customers, ensuring that payments are secure.

Improved User Experience: Leading service providers have optimized their payment processes to be incredibly user-friendly by connecting directly to the customer's bank, no manual entry of card details or other payment information is required. Often a payment only requires a simple biometric approval in their existing bank authenticator. This ease of use is particularly appealing to international travelers who value quick and hassle-free transactions.

Broad Acceptance: Extensive coverage across Europe ensures that more customers can take advantage of this innovative payment method. The growing preference for A2A payments in markets like the Netherlands, Poland or the Nordics is a testament to its effectiveness and popularity.
 

Real Results and Future Prospects

The implementation of A2A payment services within the tourism sector has already shown impressive results, which can inspire similar successes across the industry. Since the rollout of these services, there has been a significant uptake in the use of A2A payments. For example, in Finland, A2A payments have achieved substantial market share, while in traditionally bank-payment-resistant markets, the share-of-wallet has also exceeded expectations. These numbers indicate a strong and growing preference for A2A payments among customers.

Looking ahead, businesses in the tourism sector can benefit from experimenting with various checkout designs and communication strategies to further optimize the customer experience. The ultimate goal is to drive greater adoption of pay-by-bank methods, establishing this innovative approach as a standard in the tourism industry.
 

Conclusion

The adoption of A2A payment solutions marks a significant milestone in the evolution of payments within the tourism sector. By leveraging this technology, tourism businesses can reduce operational costs while delivering a superior, secure, and efficient payment experience to their customers. As more travelers embrace this new payment method, the future looks bright for the tourism industry, paving the way for a more streamlined and customer-friendly approach to payments.

Would you like to see how realization can look in practice?