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Mobile Payment is the Future of Travel & Tourism—Here’s Why

By: Courtney Kubitza
First Published: May 17, 2019
Topics: STHM School

The future of money is in your pocket—the pocket you keep your phone in, not your wallet. A growing number of smartphone users around the world are using their mobile devices for payment through a variety of technologies. These on-the-go digital assistants make it easy for people to make purchases with a simple scan or tap. And, many travelers are adopting this technology, making it easier to enjoy their journeys with speed and ease of purchasing.

As 83% of today’s travelers take their mobile devices with them, the devices offer a gateway to untapped potential for hotels and travel-related companies to grow their business. But, how should these companies invest their time and resources into mobile payment technology to make an impact?

The answer lies in research published by the U.S.-Asia Center for Tourism and Hospitality Research at Temple University’s School of Sport, Tourism and Hospitality Management.

Lessons from a Thriving Mobile Pay Market: China

In just a few short years, mobile payment has become ingrained in the lives of Chinese citizens. From retail purchases to travel bookings, 61% of all global mobile payments are made by Chinese users. As the world’s biggest spender in outbound travel and the largest mobile payment market, China offers the global hospitality and tourism industries key insights into how to take advantage of this technology.

According to research from Temple University’s China U.S.- Travel Monitor Program, 97% of Chinese respondents stated that they have used mobile payment during domestic and/or international travel.

This research revealed shopping and dining are the most common services paid for by mobile payment, followed by accommodations, tourist attractions and flights by Chinese outbound travelers. Using Alipay and WeChat Pay most frequently for their purchases, tourists easily adopted the new technology for payment thanks to the convenience, speed of checkout and security.

Although this new technology makes it easy for Chinese travelers to pay for services and products without the need for wallets or exchanging foreign currency, mobile pay is far from perfect and offers an opportunity for improvements. When asked about their worst experience, respondents complained of poor WiFi and the lack of consistency across merchants and platforms.

Unlocking the Potential of Mobile Payment in Travel

In the United States, the number of mobile payment users is expected to hit 150 million by the end of 2020 and mobile payment transactions are expected to reach $2.74 trillion in 2021. Looking at the case study in China, travel-related service providers, hotels and destinations can adopt mobile pay into their strategy now to create success for the future.

For companies offering travel services and products, mobile pay is being demanded by today’s tech-savvy travelers. The low transaction fee, powerful business functions, and opportunities to connect and engage with customers during their travels will be beneficial for all companies, especially small travel businesses. To increase the use of mobile pay, an organization should offer incentives like discounts.

WiFi and the lack of consistency across platforms have been identified as  weaknesses. Therefore, investments aimed at developing more reliable WiFi to facilitate additional mobile payments as well as interoperable mobile payment platforms, will be key to success for travel-service providers.

With a focus on the future, the tourism industry has the opportunity to be a pioneer in leading economic growth through mobile payment.

The white paper continues to explore more ways for travel-service providers, mobile pay service providers and policymakers to impact the success of mobile pay for the tourism industry.

Download the full report to see the detailed survey and additional opportunities to unlock the potential of mobile pay in tourism.

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