Consumer tastes demand airlines adopt mobile pay

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Mobile-enabled travel commerce is evolving from a distant vision and “nice-to-have” to marketplace reality and an airline’s operational “must-have.”

Slightly more than one-quarter of airline payment professionals say their executive teams have not yet thrown their support behind mobile payment strategies. Prevailing trends are driving airlines’ interest in mobile commerce, so what's keeping them from embedding commerce into the entire passenger experience?

And what's keeping them from adopting new technologies and digital wallets that make it easy for their passenger to experience all interactions – including payments - from a single device?

According to the airline executives we surveyed, several factors are impeding a comprehensive mobile commerce strategy, including the lack of outright passenger demand (39%) for mobile payment functionality, and the costs and complexity of supporting some of the market's popular digital wallet solutions (30%-41%). We commissioned a survey of more than 50 airline ecommerce, payments and revenue professionals in North America and Europe.

More airlines are moving toward a scenario in which they can sell a variety of products and services to passengers directly from their mobile devices, in essence embedding mobile commerce throughout the entire travel experience. And they acknowledge that mobile commerce will enable new revenue-generating transactions that focus heavily on day-of-travel purchases, in-flight and post-destination sales.

They are not there yet, but trends suggest airlines need to get on board with mobile in the near future. Airline executives identified the following market changes and trends as most influential in their decisions to consider and support a mobile commerce strategy:

48% acknowledge that younger, raised-on-mobile travelers are more receptive to mobile payments (and will expect them throughout the travel experience). According to eMarketer, more than one-third of Millennials will use mobile payments in 2017.

46% credit better onboard Wi-Fi as a reason for rolling out mobile payments and digital wallets; RouteHappy's latest Wi-Fi report indicates that in 2017, airline passengers have a 39% chance of boarding a Wi-Fi-enabled flight, up 8% from 2016.

43% are aware that their passengers are already using mobile payments and mobile banking services for non-travel activities.

41% say passengers in their key markets travel with a smartphone, recently acknowledged in a global Expedia traveler survey as today's "most indispensable" travel item. TechCrunch notes that by 2020, more than 6 billion smartphones will be in use around the world – the same year that mobile-only subscriptions will overtake fixed-line subscriptions.

39% say more alternative mobile payment methods are appearing in their markets. A recent Forbes article that looks at the proliferation of mobile payments in China and Asia, also indicates that mobile wallets will evolve beyond payment-only capabilities to become "powerful customer engagement tools with innovative features," including social gifting, augmented reality coupons and peer-to-peer payments.