The demand for alternative payments will continue to flourish in 2017. The question remains as to whether the industry will be ready to meet the demand.
In 2016, credit cards and debit cards remained the most popular payment method for travelers across the globe, but recent data proves that times are changing. Worldpay, a leader in online payment services , surveyed 12,000 people in six different countries who booked a flight or a vacation package in the last year, to better understand why people pay the way they do. The findings revealed that global travelers are embracing alternative payment methods for travel, a trend we can expect to continue to grow in 2017. As other payment types become more popular, travel industry providers will have no choice but to adapt to the growing trend, or risk alienating the technologically savvy traveler of the future.
Although many travelers opt to use their credit cards to pay for travel, it doesn’t necessarily mean it’s their first choice. In fact, 95% of people who said they prefer using credit and debit cards also said they would use their country’s most popular alternative payment method if given the choice. Countries like Germany, Australia, and China have already seen large percentages of travelers opting for alternative payments such as PayPal and Alipay — most of those travelers were between the ages of 18-25. In Germany, 35% of travelers in that age group purchased a flight using PayPal, with nearly 30% using the alternative method when booking travel packages.
Younger generations have always been quick to adopt technology making it no surprise that travelers ages 18-25 are less likely to use credit cards and more likely to embrace alternative payment methods. The only country that appeared to go against this trend was India. 56 – 65 year olds in India led the pack with alternative payments — nearly 30% of travelers in India opt for e-banking when booking airline tickets. In India, access to credit is closely linked to one’s income, explaining why credit card usage is lower between younger and older audiences.
Another payment type that we can expect to see more of in 2017 are installment based plans. As travel costs continue to increase, the ability to pay for vacation packages all at once becomes more difficult for travelers across the globe. Installment based plans are thought to alleviate that burden. Worldpay’s survey found that 75% of respondents would pay for their vacation packages in installments if given the option. 85% of respondents from Brazil prefer installment based plans, given it’s the cultural norm for Brazilians to do so. India and Australia also saw an overwhelming desire for the option with 90% and 76% of travelers embracing the idea, respectively. Outside of Brazil, the demand waned when travelers were asked about paying for airline tickets with installment plans.
The pace of technology will prove to be a driving force in travelers embracing alternative payment methods in 2017 and beyond. Younger generations are already opting to use methods such as PayPal, Alipay and installment plans to pay for travel. In the future, it won’t be enough to simply offer travelers payment methods that they’re accustomed to. If travel industry providers want to gain an edge on the competition, they’ll need to start listening to what their customers want and offer them the payment methods they prefer.
To find out more about global payment trends, check out Worldpay’s Why Do They Pay That Way tool.
This content was created collaboratively by Worldpay and Skift’s branded content studio SkiftX.