Mobile Payments May Be Taking Flight

by Net Future Institute on July 2, 2014

By Chuck Martin

The idea of mobile payments being up in the air could be taking on a whole new meaning.

Many airlines appear to want to enable travelers to pay by phone on the plane.

The majority (71%) of airlines believes the future of airline payments is in mobile, according to a new survey, and more than a third (36%) of them plan to accept mobile payments on-board flights within the next two years.

The number of airlines accepting mobile payments increased from 10% in 2012 to 25% last year, based on the survey of 68 traditional and low cost global airline carriers by WorldPay.

Airlines already provide a number of services by mobile and more appear to be on the way. As any frequent flyer knows, most airlines have mobile check-in and the survey found that 71% expect to within two years.

The reasons pushing mobile payments along for airlines are somewhat split, with half (50%) seeing it as a way to keep up with competitors and almost as many (45%) as a way to increase revenue.

Airlines expect that extra revenue to come from a number of places within the next two years:

55% — Paying for a flight
55% — Ancillary sales
47% — Buying an upgrade
42% — Buying baggage allowance
28% — Paying for onward travel
26% — Buying inflight good and drink to consumer on board
20% — Buying inflight duty free goods

Mobile also is overtaking self-service kiosks as an investment priority, according to the survey, with almost a third focused more on mobile devices. More than a third (40%) of airlines say kiosks will be less important in the future. The current investment priorities:

31% — Investing equally in kiosk and mobile services
29% — Investing more effort in mobile devices
29% — Investing more effort in developing kiosk services
24% — Don’t know

Mobile payments also present airlines with a broad range of challenges, with the risk of fraud at the top of the list. Here’s the complete list of challenges, based on the Alternative Payment and Distribution Landscape report:

65% — Risk of fraud
65% — Integration with current systems and processes
63% — Diversity of mobile platforms and operating systems
51% — Payment security
44% — Data security
37% — Availability of resources for implementation
30% — Cost to implement
23% — Insufficient evidence for ROI
12% – Selling in to the business internally
7% — Less visibility due to outsourcing/partnering
7% — Customer understanding and/or enabled equipment

The biggest behavior modification here may be changing the flight announcements to turn off and put away a phone to take them out and power them up.
 

 

Chuck Martin is Editor of the mCommerce Daily at MediaPost and writes the daily MobileShopTalk column. He is the author of “Mobile Influence,” “The Third Screen,” and “The Smartphone Handbook.” He is CEO of Mobile Future Institute. Chuck Martin is a frequent Mobile Keynote Speaker and Mobile Marketing Speaker internationally. He also addresses Social Media in Mobile.

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