has made payments a top strategic priority

Question: When isn’t a global travel conglomerate just a global travel conglomerate?

Answer: When it is also a FinTech.

Discuss new initiatives during the recent third quarter earnings conference call, CEO Glenn Fogel told analysts the company has focused its new in-house FinTech unit on payments, as well as its ‘Connected Trip’ initiative, two of the strategic cornerstones of growth as the travel industry moves away from months of related restrictions to COVID in spurts.

Creating an in-house payment infrastructure and integrating travel into the connected economy by allowing consumers to book and pay transparently are both revolutionary and evolutionary steps for the 25-year-old platform. behind travel brands like Priceline and KAYAK.

And by its own admission, the company still has work to do to create an end-to-end global travel ecosystem that does everything – including payments – and enables monetization in ways that were difficult, if not impossible, before. .

Optimizing this ecosystem is a top priority for senior Vice President of FinTech Daniel Marovitz and his team of 400 people, he recently told PYMNTS’s Karen Webster. And making it transparent has taken on increased urgency.

Great ideas give way to great experiences

Twenty-five years is a long time to make the online travel experience better and more efficient. Seamless. And by Marovitz’s own admission, the collective ‘we’ in payments, and the collective ‘we’ as in the traveling public, have become quite comfortable with the improvements in the experience over the past decade. , specifically.

However, behind the scenes, there is still some turbulence.

“The one area where I think we haven’t made much progress… is the financial friction of travel. It has a few features that stand out from the other categories.

Foremost among these frictions is the future nature of the reservation and when payment is collected, features of the travel experience that came to the fore when cancellations increased due to COVID.

New PYMNTS study shows 44% of U.S. consumers who made a travel reservation in the past year have canceled or postponed concerns about COVID, wreaking havoc on travel payments and highlighting weak ties in the customer experience of companies.

“We went from this… fintech and payments company to a reimbursement company for a few months, dealing with these force majeure claims., and even non-refundable bookings were suddenly refundable. So it was interesting, ”he said.

Other sticking points include the seasonality of destinations, the changing nature of how payments are made and processed, foreign exchange (FX) fees and payments.

All of the areas where Marovitz said is gaining ground through experimentation with the platform and smart use of data.

A big supporter of A / B testing, he said he tells new hires when they join that Booking has no real interest in their good ideas but if they can “design a good experience”.

“We have incredibly rich data going back 25 years because the company took this data-centric approach 20 years ago,” he said, adding that like Amazon and Google, Booking is very structured and disciplined with regards to data and database decision making. And use it to find frictions, resolve them, and monetize them for the benefit of their platform’s customers.

Marovitz said Booking data is helping its travel partners better manage cash flow in these uncertain times.

He said Booking has developed a predictive algorithm which he calls an NITS score – which means “no intention to stay”. The algorithm helps Booking predict, based on historical behavior and cohorts, whether a booking is likely to stay or not.

Variants of the algorithm are “used for financial forecasting and even the application of pay-per-click or retargeting.” It has been used, he said, in applying for discounts or other loyalty programs.

In the context of FinTech, this is the start of a model that could help Booking meet the working capital constraints of travel operators – a potentially huge breakthrough for those whose credit options may be limited, especially in these uncertain times of COVID.

Get the study: The Smart Receivables Playbook

Create two-way simplicity for travel payments

While issues related to the pandemic still cast a shadow over travel, cash flow and cash management are now top priorities for online travel agents and suppliers on their platforms.

Given his background in the banking industry, Marovitz said he began to think about volatile pandemic cash flows, money duration, execution risk, and other risks that are not possible. found nowhere else in e-commerce.

“What people [in the travel sector] let’s not talk about cash management, as a non-refundable reservation is paid immediately and a refundable reservation, or flexible reservation, is paid upon check-in. ”

Resolving this issue will be at the heart of’s internal FinTech concerns.

The mission of the Marovitz unit today targets “totally unresolved and unanswered sources of pain for both sides of the market. The FinTech unit has two objectives. Goal number one, which is the overriding goal, is to make’s traditional flywheels spin faster. has the user base and scale to attract more vendors, giving it more inventory to choose from. But there were a number of financial flywheel catalysts that he said Booking had mostly ignored.

“If we can let bookers pay in the currency of their choice, if they can spread payments over time, if partners can be paid, depending on the jurisdiction… in the currency of their choice… these are all mechanisms that are really powerful and positive.

Keeping payments in-house is a strategic part of achieving this vision.

“If you look at the themes that are unfolding in the world of FinTech, one of the things that comes to mind is Adyen’s decision to become a bank,” he said, referring to the decision. of the Dutch payment processor to request a European bank. licensed a few years ago. “This decision is less about the ability to be an accredited institution and [lending], and more about the possibility of owning the technology that holds the accounts so that settlement is assured.

Owning the account, from a payment standpoint, creates downstream monetization options that third-party dependent PSPs do not have. And while doesn’t want to be a bank, it now functions as a digital wallet, and those capabilities might see wider applications for too long. Today, the wallet is a way to manage discounts and credits. As for tomorrow, well, Marovitz left the door open.

“I think it’s very rational to imagine that this is something that can go deeper into loyalty and deeper into friction reduction for sure.”

See also: As travelers plan ahead for post-pandemic passage, suppliers want to reduce payment costs

Today, Marovitz said reducing the cost of payments – to Booking, to the traveler, to their partners – is the goal of him and his team. The more they can use the scale of its platform to reduce system costs, the more and faster their collective payments ecosystem will benefit.

With nearly a third of total third-quarter raw bookings from being processed through its payment platform (up from around 22% across 2020 as a whole), the platform is already a case of use of the connected economy which will attract more attention – and engage more users – in 2022.

But with a FinTech focus and a growing team of 400, could Booking be to payments what Saber is to content management and distribution?

“It’s early, early. We are in a modeling and concept phase, ”said Marovitz.

Watch this place.



On: It’s almost time for the holiday shopping season, and nearly 90% of American consumers plan to do at least some of their purchases online, up 13% from 2020. The 2021 Holiday Shopping Outlook, PYMNTS surveyed more than 3,600 consumers to find out more about what drives online sales this holiday season and the impact of product availability and personalized rewards on merchant preferences.

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