S Korean Travel makes localized payment case
Neither pandemic surges nor inflation will deter adventurous South Korean travelers from booking trips in a year of recovery, but it’s an advanced market that demands more of travel experiences, the way travelers are able to pay and, in the case of suppliers, to be paid.
Regardless of the market, it comes down to strong execution of location strategies globally, as Damien Cramer, Global Head of Travel at Worldline, told PYMNTS’ Karen Webster.
To say that Asia is always behind the West “by a year or a season, if you will,” Cramer explained, “South Koreans, like Singaporeans where I am, and like some of the other maybe more developed markets in Southeast Asia, are a bit ahead of some other markets, and we’re looking forward to travel and we’re definitely planning to travel significantly.
In early June, the South Korean government eased its COVID-19 restrictions, eliminating the so-called push for “revenge trips” for takeoff.
To get the most out of it, travel suppliers must cater to local and regional payment preferences or risk running into foreign exchange (FX) issues that can kill a transaction, Cramer said.
“The biggest challenge, if I had to make it really basic, is the difference in language and cultural experience,” he said. “If you’ve ever branched out and hopped on a native [eCommerce] website or a native [travel] website in Indonesia, the product, the way things are presented and the user experience is quite different from how many westerners like to see it.
It does this by embracing and reflecting cultural, linguistic and regional differences and presenting them appropriately for South Korea – or any distinct geographic market – because what works even in a border country will work at all in neighboring markets.
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Conversion of local payments
Highlighting the rising costs of international travel, Cramer said: “What we need to be aware of is that in this costly purchasing decision there is an important level of trust – trusting the way the payment solutions are presented, the types of payment solutions presented, are they payment solutions that I know, trust and recognise? »
Yes, Visa and Mastercard are there, but they go hand-in-hand with “a lot of other very localized payment options where consumers have a high level of trust, and they’re heavily integrated into that market,” he said. he declared to Webster.
“I think we’ll see situations where customers will go, ‘if the airline… that I want to book isn’t going to present me with the option to pay with my Samsung card or whatever, but I can access a online travel will do that, I may be more inclined to use that secondary payment option or secondary channel, rather than the primary channel,” he said.
It’s a failed conversion and a lost customer – two punches that all players try to avoid.
Approval rates come into the discussion with urgency when cross-border payments are involved, and there are issues that travel providers and payment providers need to address.
“I’m not a very tech-savvy person, but there’s a dark art, I think, associated with approval rates, how and where you route transactions,” Cramer said. “One of the things that’s mostly true is that the closer you can get to a localized network and a localized solution, the more likely you are to get approved.”
Read also: Worldline and Myra team up to deliver better hospitality payments
Data, trust and “Revenge Travel”
The pain and friction of international routing and approvals for expensive travel purchases that set off alarm bells with fraud schemes underscores the role of trust in these transactions.
“Travel is an ambitious service,” Cramer said. “What you get is a market ripe for some level of fraud. People want it, some people can’t afford it or want a better product or better service or whatever, and it happens. lends itself to levels of fraud.
Calling Strong Customer Authentication (SCA) models “a very good way to combat this”, Cramer said the new authentication capabilities are a huge improvement over last-generation solutions which he called ” rude and clumsy” and designed to protect traders more than consumers.
Meanwhile, he said these SCA solutions that assess fraud and risk are based on data points.
“There are some really valuable data points [being collected],” he said. “The data points that we have as a large payments processor that we can add to this are all very important and valuable when it comes to strong customer authentication.”
Worldline offers SCA services and will introduce them in South Korea as part of continued expansion into Asia and other markets.
The data goes a long way in everything from authenticating the purchase up front to issuing a refund down the line if needed, as so many others have since 2020.
“To a large extent, the rails, the infrastructure and the processes [needed] to be able to manage the reverse flow and overall risk were not in place,” he said. “We had to learn by doing. We learned by failing in some cases. We learned by co-creating a whole bunch of challenges.
Post-pandemic, there is “much more know-how and understanding, out of necessity rather than pure strategic decision-making intent, about the processes, systems and services that help manage and protect customers and the funds…and the whole mechanism around how the reimbursement processes work.”
Call it a recovery, a rebound or a journey of revenge, but pent-up demand in hot markets like South Korea is serving as a precursor to the broader global recovery, and there are new expectations.
“Ultimately, we have to adapt to consumer demand, and consumer demand rightly in this market is going to require levels of flexibility, or a higher proportion of the population requiring levels of flexibility, than they would have otherwise before that, I didn’t expect that,” he said.
“Merchant Systems and Processes [and] payment service providers like us who handle and handle the money on their behalf, through the network to issuers, have been set up to support this,” he added. “Every crisis creates an opportunity.”
It’s an opportunity with a mission. Cramer pointed to a study that showed 60% of South Koreans are “excited” about the potential of technology to personalize their travel experience.
“I was looking at that and I was like ‘OK, 60% is pretty good,'” he said.
And a lot of opportunities to exploit.