Jens Wohltorf is the co-founder of Blacklane
The payments sector is going through a huge phase of innovation and new payment technologies are having a significant impact on the business travel experience. Payments technology is influencing travel technology, which in turn is impacting the business travel itself, opening up more accommodation categories in the sharing economy, enabling Asian travellers to access more western travel services and facilitating innovation in mobile money transfers.
Business travellers want the convenience of organising travel through one global service, avoiding the need to download local apps and clones when arriving in new countries. Innovation in payments is providing the infrastructure to help travel technology businesses evolve to satisfy demand from business travellers for global services.
Stripe, the US-based payments startup making it easier for companies to accept credit card payments online, is set to impact business travel globally. It recently partnered with Alipay to enable travel merchants to detect if a buyer is located in mainland China and give them the option of paying via Alipay, the Alibaba-owned service with more than 300 million users.
The partnership will help open up the Asian travel market to western travel startups, which have traditionally found it tough to sell to Asians, who are accustomed to using Alipay when buying travel services online. Subsequently, Asian business travellers will have access to a broader variety of emerging travel technology from around the world to arrange accommodation and transport.
This is good news for travel businesses looking to tap into lucrative business travel spending in China, projected to increase by 17.2 per centand surpass business spending in the US by 2016.
The sharing economy depends on payments technology to split and divide payments among a number of providers. Leading marketplace payments products include Braintree Marketplace, Stripe Connect and Mangopay; they all enable travel businesses to split payments between themselves and providers such as hotels, transport services and restaurants, giving more options to business travellers.
For example, Airbnb uses Braintree Marketplace to split payments in its sharing economy accommodation business. Traditionally a popular site for vacation rentals, the startup is now successfully tapping into the business travel market, with 8 per cent of bookings registered as business travel last year. Business travellers are increasingly using the service to discover more personal, better value accommodation experiences that they wouldn’t find in normal hotels. Airbnb’s new business portal is already used by 30 companies, including Facebook, Salesforce and Eventbrite.
Mobile payments technology, such as the PayPal app and Google Wallet, are enabling business travellers to pay for things without carrying various currencies and multiple cards in their wallet across numerous borders. Travel merchants are investing in this type of mobile payment technology so that business travellers do not have to worry about carrying cash, credit cards and other loyalty cards when away from home.
Consequently, business travellers are becoming an increasingly mobile and cashless breed, using their smartphones to pay for dinner in restaurants and drinks in hotel bars.
Google, PayPal, Stripe, Paymill, Braintree and a host of other startups are constantly releasing new product updates and expanding into new markets, meaning it’s tough to keep up with innovation in payments. Any decision on which payments technology is most appropriate must be based on local trends for travellers. In Germany, for example, credit card penetration is relatively low and there is a strong tradition of paying by bank transfers or direct debit, something Blacklane considered carefully when rolling out the service in the country. Likewise, Alipay must be a serious consideration for any travel business eyeing the Chinese market.
Payments infrastructure is evolving rapidly and shaping the direction of the travel technology industry. Travel businesses are using this to sell to an increasingly international customer base, tap into the sharing economy and access the increasingly mobile business traveller. This is transforming the business travel experience. Business travellers should expect more of this as startups, which were traditionally consumer-facing, fine-tune new products to tap into the more lucrative business travel market.
Read our contributor biography of Jens Wohltorf