malaysiang
KUALA LUMPUR, A new research revealed that 66 per cent of travel companies are seeing their profit margins impacted by outdated or complicated payment systems, with nine in 10 expected to prioritise modernising their financial operations this year.
In a report released by global payments and financial platform Airwallex, and travel research company Skift, the travel industry is also being challenged by shifting payment preferences since the COVID-19 pandemic. While revenue from cross-border payments is on the rise, the unprecedented diversity of payment methods in different markets complicates transactions for 70 per cent of travel companies.
Airwallex Co-founder and Chief Executive Officer, Jack Zhang stated that as global travel continues to surge, travel companies increasingly rely on quick and seamless cross-border payments to surpass customer expectations at every touchpoint.
‘However, our latest study shows that slow and outdated payment processes are increasing the cost of moving money internationa
lly, which is eating into their profits – modest at the best of times.
‘Modernising their financial operations with a unified and scalable payment solution will be critical to reducing the cost and friction associated with managing cross-border transactions. For smaller players, this can be what levels the playing field, enabling them to compete with larger, more established counterparts,’ he said in a statement.
The findings provide a unique perspective on the financial challenges and opportunities that companies face as they grow and operate on a global scale, and offer rare insight into the issues travel businesses experience with end-to-end payments and financial operations, especially with the growing trend of cross-border transactions.
The report further showed that travel customer payment preferences are shifting with local payment methods being increasingly used. Despite credit cards, debit cards and digital wallets remain by far the most common customer payment methods, travellers are increasingly
using local payment methods or peer-to-peer payment apps, which can vary widely by market.
In addition, cross-border transactions soar, but bring significant global payment challenges, with nearly 40 per cent of travel executives reporting half of their revenues to be from international customer payments, while inefficient payment systems are detrimental to profits with 90 per cent travel executives saying financial operational upgrades are a priority.
Airwallex and Skift surveyed 473 travel executives in April this year across seven global markets including Australia, China, Hong Kong SAR, Singapore, the United Kingdom and the United States.
The survey respondents confirmed that they make decisions about payment processes and financial operations for a travel company across the sector including online travel bookings, travel operators, tours and activities, and destination management.
Source: BERNAMA News Agency
