Pay By Instalment Preferred by Millennial Travellers

Pay By Instalment Preferred by Millennial Travellers

March 13, 2020

Amadeus Managing Director Bart Tompkins says millennial travellers demand greater payment choices, transparency and security and argues that a poor payment experience takes away from the overall vacation experience.

You’ve spent hours searching for the holiday of a lifetime and you’ve finally found the perfect destination, with a hotel that’s just right, convenient flight times and exciting activities.

Now imagine the price is presented in an unfamiliar foreign currency. The travel retailer doesn’t allow you to pay with your usual method and you get the sense the website may not be fully secure.

According to Amadeus’s major new study Frictionless Travel Payments: from Complexity to Competitive Advantage, travel and payment trends are colliding to drive new consumer behaviours, with 74% of people now booking travel less than two months before departure and millennials are more than twice as likely to do so than those over 55.

The study says 70% of travelers say a good payment experience would make them select one travel provider over another.

When it comes to meeting the payment expectations of millennials, the study claims this growing group of late bookers demand greater price transparency, a wider choice of payment methods and improved security.

With millennials also more than twice as likely as those over 50 to ditch their shopping basket, payments represent a significant opportunity for the travel industry. New innovations such as ‘pay by instalment’ are particularly popular with millennials. 66% of all travelers confirmed they would be more likely to buy with an instalment option and 56% said they would purchase higher-value services if they could spread the payments.

As the average traveler now relies on more than four different payment methods throughout their trip, According to Amadeus Managing Director Bart Tompkins, it’s clear to see why 38% of travellers cite payment method choice (e.g. cards, bank transfer, e-Wallets) as their number one requirement. However, Tompkins claims what matters even more is transparency, with 47% saying unexpected fees, charges or foreign exchange surprises are a major point of friction.

“I’m confident that 2020 will be the year in which we see travel sellers aligning their payment strategies to meet not only customers’ demands but also their preferences. It’ll be the year where we see a significant step forward in delivering a frictionless payment experience in travel. However, with  75% of travel firms still finding it hard to offer a simple and consistent payment experience there’s work required to deliver on travelers’ desire for greater choice, transparency and security. We’re focused on building a wide range of partnerships that help our customers innovate more quickly to deliver on changing traveler demands,” says Tompkins.

Key Take-aways

The study includes a range of recommendations for the industry to deliver a frictionless payment experience:

Improve payment choice at checkout by regularly monitoring traveller payment trends at a local market level and having a process to continually test different payment methods locally.

Boost transparency by integrating multi-currency conversion so travellers gain ‘price certainty’ in a currency they’re familiar with and clearly displaying any charges up-front.

Build trust by clearly communicating the steps you’ve taken to secure your customers’ data and by having a robust two-factor authentication process in place.

Empower last-minute buyers by using open-APIs and cloud to deliver rich, fast and reliable payments as well as personalizing the payment methods you offer a traveller during the trip; and

De-stress travelers with automated and pre-booked services by ensuring ancillary services like baggage or lounge access are offered pre-trip, and by providing ‘book-now, pay-later’ options so people can enjoy the moment, but also by modernizing payments in areas like the airport.

The full report is available for download here.

(Ed. Amadeus says the study was developed based on a global survey of 5,665 travelers in 10 representative markets carried out by Sapio Research on behalf of Amadeus. The study also draws on the results of a survey of payments leaders from 70 travel retailers and a range of interviews with Amadeus’ travel payments representatives.)


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