Mobile Technology is Helping the Travel Industry

Mobile technology is currently helping the travel industry to grow at a faster pace. Whether it is about booking, researching for dining and entertainment options, looking for a particular location at a destination or in-flight customer service, mobile is everywhere.

One of the most important changes coming to mobile technology is in the area of mobile payment systems.

The industry has made tremendous progress in the last 18 months. There are two sides to this equation, on one hand both mobile phone and POS manufacturers have a healthy pipeline of devices that support the technology. On the other, several providers that leverage NFC technology for payments have either announced plans or have already launched services. Overall, the industry is closely analysing consumer perception of mobile payment security and how it will inhibit the growth of mobile payments.

As of now, players are still in the early stages of mobile payments. A report released by PayPal in November 2011 indicated that 2016 will be the year when UK shoppers will be able to use their mobile phones to pay for things on the high street with digital money rather than cash, cheques or cards. There are key ecosystem dependencies necessary to drive broad adoption (for example, merchant and mobile device readiness). Once that value proposition is clear from the end-user perspective, various stakeholders will naturally try and adopt the services.

Growth

The bullish sentiments at this juncture are also being substantiated by projected figures. For instance, at the start of this year, eBay Inc. CEO John Donahoe stated that the group is projecting that PayPal will see $7 billion in mobile payment volume in 2012. PayPal exceeded expectations for 2011, reaching $4 billion in mobile payment volume. This was a huge increase from the company’s original 2011 prediction of $1.5 billion and the $750 million in mobile payments witnessed in 2010.

As of today, consumers are increasingly adopting wireless data services, including contactless payments. Overall, the affiliation with smartphones is driving the change and transforming lives.

In December last year, eMarketer estimated that mobile commerce sales was to reach $6.7 billion in 2011 in the US—a tiny fraction of overall retail sales but a 91.4 percent increase over 2010. In 2012, sales will rise another 73.1 percent to $11.6 billion.

Travel Sector

Travel companies acknowledge that m-Commerce is challenging because in many cases the platform to transact over are still immature.

As travel companies take initiatives to refine their mobile portfolio, the initiatives are being marked by the introduction of more features that involve transactions. For instance, Melia Hotels International recently launched property mobile apps where users are able to book restaurants, spa treatments, activities etc. The group considers its on-site app as one additional service it intends to provide to its guests so they can have the best experience possible while staying with the group. And making reservations or booking via mobile devices is part of such initiatives where the focus is on offering consumers’ more control over their journey.

“From making restaurant reservations, to signing up for all kind of activities or even meet and greet with other guests, we want you to be able to control your whole stay right from your phone,” Antonio Batanero, Senior Director Distribution & Ecommerce, The Americas, Melia Hotels International told EyeforTravel.com’s Ritesh Gupta in an interview. “Now with your information on file and through a mobile app we can provide our guest with the one-click-reservation button we always dreamed about.”

Expectations as a travel player

Batanero says, like most of us, he also believes our mobile will substitute sooner or later our wallet.

“When the use of mobile as a payment device is extended –some experts say mobile payment systems are 3-5 years away in terms of full deployment – then it will not be necessary for you to carry all the cards that you have now on your wallet,” he said.

There are other associated developments that an industry professional needs to be aware of as well. For instance, what to expect at the time of checking-out of a hotel.

Regarding the same, Batanero added, “…we have yet to implement the m-wallet when we’re already talking about the cloud-wallet. In the near future, according to the leading payment systems companies –  Paypal, Amex, Visa  etc. – all your finance information would be available in the cloud. That means, for example, we will no longer need your card, not even your smartphone when you checkout at the hotel. Probably, we will have some sort of fingertip reader, a voice recognition device or something similar to prevent identity fraud and that will be it. That way you do not need to stop by the front desk on your way to the airport unless you want to say goodbye to our friendly staff.”

Not just NFC

There is a need to recognise that NFC is just one type of technology that may be used to support mobile payments. The industry is witnessing growth in mobile payments, and that’s set to continue regardless of the fact that very few consumers have NFC-enabled phones. Providers of NFC enabled services need to start engaging with consumers to familiarise them with this payment model.

“For all the hype around NFC, it’s a long way away from being viable,” Glenn Gruber, AVP, Market Development, Travel Technologies, Ness Technologies.

The travel industry also needs to take a cue from the way the retail sector is going about the NFC technology in particular and other mobile payment-related options.

Firstly, rather than just focusing on mobile payments in case of NFC, retailers are also looking at strengthening their loyalty programmes via NFC. These companies are hoping to leverage some sort of couponing from NFC for their loyalty schemes within their stores for their customers.

Secondly, a lot more action is also being witnessed in the mobile apps arena as start-ups gear up to chart a whole new frontier for the payments industry. For instance, there are apps that now that allow individuals/ entities to take credit or debit card payments anytime, anywhere.

Future

With reference to mobile payment systems, we need to wait and watch where the technology takes the world.

“No doubt that many big and new players are into the market and are in the process of revolutionising the payment modes…though many have tried to make it  “Credit card-less” business, it seems the time is still far away to see something concrete,” according to Anil Batra, VP, Travel, Transportation and Logistics, NIIT Technologies.

According to Batra, technology is here to stay to enable users to buy without paying cash or swapping card. The question can be seen from three dimensions:

·    Different worlds may see different technologies in the coming future.

·    Adding to its different worlds are actually using mobile payment technology for altogether dissimilar reasons.

·    Real mode of payment – cash, credit card or something else.

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