Low Cost & Regional

ATPS2024: Airlines are having to balance payment choice and keeping up with regulations

Constantly changing payment regulations is forcing airlines to balance offering customers choice and generating growth, last week’s Airline and Travel Payments Summit heard.

Liam Nuttal, payments manager at Gulf carrier Etihad, told the event in London that he has to make sure the airline remains compliant with new regulations within its existing payments infrastructure.

“It’s about trying to generate that balance, to leverage choice. You have got to work with partners to try to grow in a sustainable way but actually to also keep up with the market. Payments are changing on a weekly basis.”

More digital forms of payments and services like buy now pay later and deferred instalment payments are becoming ever more popular among consumers, especially for big ticket items like flights and holidays.

Airlines are having to keep up with this trend as customers increasingly choose the payment terms most suited to them and expect to be able to transact in their own currency and using the payment method they are accustomed to in their every day lives.

Nuttal said Etihad is back in a growth trend and wants to grow rapidly and Internationally. “But we have to do that in a sustainable way to facilitate what we want for the consumers from a payments perspective.”

The issues of chargebacks, fraud and reconciliation are a dampener on growth. “We really want to empower our customers to leverage opportunities. Unfortunately, there are challenges,” said Nuttal.

“For airlines with a high transaction value, that could preclude them from using a form of payment. I might want to bring in these forms of payment for customers but that brings with it headaches and risks. We are working towards that but I do not think we are there yet.

“Being a global carrier bring its own unique challenges. There is room for improvement and room for growth and everyone’s solution will be unique.”

Cristelle Benin, senior manager payment fraud and chargeback at the Swiss Lufthansa Group, said: “ For the consumer it’s great customer experience to have so many new forms of payment but for us in the back office it’s a bit of a different situation.

“You have to get used to these forms of payment, how they work. How they work with chargebacks, can you get a chargeback with fraud? You have to understand everything with this new form of payment.”

Benin said this requires resources to train payment teams in area outside of just being able to accept the payment and collect money. “This is not usually the first thing that the team is thinking about,” she added.

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