Leading e-payment specialist PPRO, has in association with Klarna, a leading global payments provider and fully licensed bank, today launched the first European Travel Guide . The research report reveals that one in five adults have cited a lack of flexible payment options as their biggest online travel shopping frustration.
According to the report, more than a third of adults said they would be more likely to buy travel packages if companies offered the chance to pay in instalments, and that millennials (25-34 year olds) are the most frequent online travel shoppers – and are the most likely to shop flexibly in search of the best deal.
In addition, airline and hotel purchases account for 15-25% of total e-commerce spend value across the 13 countries highlighted by the report. This ranges from one-lira or one-zloty-in-seven spent online in Turkey and Poland, to one-krone-in-four in Norway. This demonstrates just how perilous the situation is for travel companies – unless they react to people’s concerns and offer flexible payments, they could lose out to competitors who do.
The report provides insights into e-commerce market sizing data, travel sector average transaction values, e-commerce payment splits, plus details of popular local payment methods (LPMs). All indicators show that the online travel sector is growing in importance and global reach, yet payment remains resolutely local.
Klarna offers a range of payment methods preferred by customers in 16 different markets. The payment options empower consumers by giving them the freedom and flexibility to choose when and how they want to pay, and thereby allowing them to tailor their travel budget to their needs. The popular payment options aim at providing consumers with increased control, clarity and flexibility.
“Payment sits at the intersection between commerce and finance. It is critical for driving simpler, smarter, more customised experiences. Yet greater personalisation on the front-end — allowing customers to pay anyone, anytime, anyhow from any device or funding source — creates greater complexity on the back-end. With more than 145 different local payment methods of relevance in Europe alone, Acquirers, payment service providers (PSPs) and merchants must accept that unless they can localise payments, they will miss out on sales, comments James Booth, VP of EMEA at PPRO.
“Take the Netherlands as the key example of a high banked population. We see these bank account-based ‘push’ payment methods overtaking card-based ‘pull’ methods in Europe. This will be driven by consumers’ desire for more control and protection of sensitive data, and by merchants’ desire to reduce the costs and risks of traditional ‘pull’ methods, such as chargebacks, fraud and PCI DSS.
“This is further evidence that consumer demands are changing, and traditional payments are becoming secondary in choice. Regions across the world must ensure their payment methods are up to date and contemporary, otherwise travel companies across the globe will become less relevant, and ultimately, struggle in today’s market’, adds Booth.
“Consumers shopping for travel online are frustrated with the lack of flexible payment options available. At Klarna, we see a huge opportunity to help these travellers by offering flexibility, control and customer-centric services which reduces the frustration of not finding the right payment option. These customers want to explore and seek new experiences and we want to ensure that the planning and payment journey is also a great experience for them, regardless of the market,” says Ian Mahinic, Senior Commercial Manager at Klarna.
Source: Company press release.