Ebene, 19 November 2024 – In Mauritius, it’s estimated that online sales will grow 7.89% over the five-year period from 2024 to 2029, resulting in a sizable market volume of US$516 million in 2029. In this growing and competitive market, online travel agents (OTAs) that innovate to offer people new ways to book and pay for their holidays will come out on top, says Rahul Jain, CEO of Peach Payments.
He believes new payment trends provide insight into what OTAs should consider when it comes to the path-to-purchase in their sector.
Trend #1: Upfront payments
It wasn’t until a few years ago that many OTAs and travel aggregators started managing prepayments.
“It used to be that a traveller would make their reservation and the property would handle payment or the guest would pay at check-in. But that comes with the risk that the guest won’t arrive, which impacts occupancy rates and profit margins. This has driven a significant shift towards OTAs that enable and manage upfront payments,” Jain says, “and this comes with some complexities that OTAs need to consider.”
These challenges range from working with different currencies to accepting local payment methods, and then distributing payments to properties.
In the Mauritian context, of the country’s international arrivals for the first semester of 2024, as many as 137,661 tourists came from the rest of Africa, which is the second largest region after Europe at 403,480 tourist footfalls. Jain suggests OTAs looking to grow bookings from these emerging markets in the region will need to consider that credit card penetration is low but alternative payment methods like mobile money are commonly used.
“If OTAs aren’t incorporating alternative payment methods, travellers will choose brick-and-mortar agencies where they can pay the way they want to,” he warns.
Trend #2: Frictionless payment options
Travel can be stressful, so making the payments process simpler and more efficient for potential customers sets an OTA apart and reduces instances of cart abandonment at checkout, Jain says.
“India’s Unified Payments Interface (UPI) payment system is an example of what is possible here,” he suggests. It may be noted that Mauritius rolled out UPI payment services this February, and has seen considerable traction since.
UPI allows users to scan a QR code to make a payment. It’s now used by over 350 million people, processing over 75% of India’s digital retail payments.
What’s especially exciting in the travel space is how quickly UPI is being rolled out internationally, allowing users to make real-time payments from South Africa to Sri Lanka to the Eiffel Tower in France, for example. They don’t have to deal in foreign currencies or navigate complex international payments – they just use the same app they use at home.
Jain notes, “Travellers are increasingly demanding ease, and frictionless technologies like UPI are becoming the norm. OTAs should be looking for ways to incorporate them if they haven’t already.”
Trend #3: Multi-currency acceptance
If you’ve ever tried to book or pay for something in a foreign currency, you know the mental maths it takes to convert between currencies. Now imagine an American or European traveller making bookings for flights, hotels and experiences through a Mauritian OTA, having to make conversions for multiple transactions.
“This is where online travel agents that offer dynamic currency conversion stand to benefit,” Jain believes.
On the one hand, an easier, more familiar experience will increase sales and conversions. On the other, dynamic currency conversion generates revenue earned through forex margins, which is typically shared between the OTA, the payment processor and banks.
By their very nature, payments in the travel sector are complex. But technology is making it simpler, giving travellers alternative options that make it easier to book, pay for, or even afford their holidays. Online travel agencies should not be ignoring these options which will help them better serve their client needs, and grow into new markets.
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About Peach Payments
Peach Payments is a fast-growing African payment solution provider (PSP) that makes online commerce and digital payment acceptance easier and more accessible across Kenya, Mauritius and South Africa. The company provides direct settlements in all three countries, as well as aggregated payment services in South Africa. It works with small and large sellers to provide a complete toolkit to accept, manage and disburse payments through web and mobile. Peach Payments’ merchant partners include your favourite food delivery services, whether you’re ordering in or using a meal kit, travel services that can help you book your next getaway adventure and even your neighbour’s side-hustle e-commerce store. For these partners and their customers, Peach Payments aims to provide delightful experiences that make it as easy as possible to facilitate online payments.
