Amadeus Future of Payments – payments integration in the travel industry
Mastercard is a name that needs no introduction, but its partner for this particular event, Amadeus, may not be as well-known in the financial world.
Amadeus is primarily a software company in the travel industry, which acts as a tech mediator between airlines and travel agents, whether they are online or physical. The system manages the booking of around 40% of all flight reservations around the world.
It is easy to see how that amounts to a very large number of payments. As a provider of gateway services to airline customers, the firm processes more than €100 billion a year.
On the other end of the supply chain, travel agencies’ payments to suppliers – hotels, airlines etc – are also serviced by Amadeus, in the form of virtual cards that offer payment methods secured via tokenisation tech and a one-time use.
In a conversation with Bart Tompkins, MD, Payments Business Unit, Amadeus, he tells us that this event is a milestone for the company, but doesn’t entail a change of direction or strategy for the company.
Amadeus is, and will be, a travel software company, he says. However, there is a large payments infrastructure integrated into the open architecture IT systems that makes up most of the Amadeus offering.
For the firm, enhancing cash flow efficiency and risk management throughout the whole supply chain has become an important value proposition, due to the ability to have perspective at both ends of the chain – travel agencies and customers, and suppliers.
The firm’s offering is unique in its coverage and offering, and this event aims to position them as an example and benchmark of how to integrate payments into non-financial IT systems. Among its partners, the firm has companies like Conferma Pay, Barclaycard, Ixaris, and of course, Visa and Mastercard.
Tompkins tells us about the importance of the travel industry, and by extension, Amadeus, for the payments world: “Both credit and virtual cards were pioneered in the travel industry, and now they are key components of the day-to-day’s financial tools.”
It is undoubtable that we will see the travel industry play a key role in the development of virtual cards, an under-used payment method across industries.
At the moment, the firm’s plans are focused on expansion. While they cover nearly 190 markets, they’re looking to support more, as well as more payment methods.
Remarkably, the event had a segment dedicated to customer experience, and how a large focus for the company is to erase the friction in payments. However, just like in banking, the struggle between security and a frictionless customer experience means that it’s never as easy as it seems. What’s more, the upcoming introduction of PSD2’s SCA standards, based around two-factor authentication, can become a hurdle if not managed properly.