APEX Insight: With Finnair set to become the first airline to accept Alipay for in-flight transactions, the airline industry is embracing electronic payment services, and taking the next step in the evolution of commerce.
Finnair is likely to become the first airline to accept Alipay, the world’s largest online payment platform, for in-flight transactions. The airline began a monthlong trial of the service on board Finnair’s Helsinki-Shanghai route, as well as in the Finnair lounge in the non-Schengen area of Helsinki Airport, on January 27. “Taking advantage of the opportunities provided by digitalization is an integral part of Finnair’s accelerated growth strategy,” said Katri Harra-Salonen, Finnair’s chief digital officer in a press release.
“Taking advantage of the opportunities provided by digitalization is an integral part of Finnair’s accelerated growth strategy.” — Katri Harra-Salonen, Finnair
In a report focused on the airline industry, CellPoint Mobile says that companies must accept and embrace the fact that passengers are leading mobile-centric lives. As more and more purchases are made through smartphone taps, instant payment systems will become expected in the cabin. “Over time, more and more airlines will integrate a larger number of mobile payment solutions – not only because the market will demand it, but also because their smartphone-carrying passengers will, too,” said Kristian Gjerding, CEO of CellPoint Mobile.
Skift noted 2015 as the tipping point at which mobile began trouncing desktop as China’s tool of choice for digital commerce. Alipay has become the largest electronic payments platform in the world, with over 450 million users – that’s 125 million more people than the population of the United States. There are hundreds of mobile payment solutions out there, such as those provided by large players like Google, Apple and Facebook, but relatively few are accepted globally. Some airlines, including Emirates, British Airways, Delta, Lufthansa and KLM, have started accepting payments though services like Android Pay and Apple Pay for flight bookings.
“Airlines and travel companies must embed 24/7 communications, transactions and payments into their passengers’ mobile devices.” — CellPoint Mobile
According to CellPoint Mobile, “Airlines and travel companies must embed 24/7 communications, transactions and payments into their passengers’ mobile devices if they hope to capture not only their brand loyalty but also the revenues they create as they travel.” Other research bears this out: almost all of Skift’s survey respondents who use credit cards to book travel said they’d use their respective country’s most popular alternative payment methods if given the chance.
Gjerding estimates that mobile-only cabins may become the norm within a few years and recommends that airlines look to the experts when it comes to integrating mobile payment solutions in the cabin. “Our advice to airlines is to ride the innovation wave by creating partnerships with the companies and vendors that are leading the charge – payment platform providers, technology innovators and device manufacturers like Facebook, Google, Apple, PayPal and others,” he explained. “There’s no reason for airlines to reinvent the payments wheel when it’s easier, faster and more cost-effective to rely on the expertise of those who are inventing the change in real time.”