How mobile payments and digital wallets will open up new opportunities in travel

The first person I ever saw using a QR code in an email signature line was Jarad Miller, around the time he was moving into his current role with United Airlines as managing director for self-service and emerging technology.

At the time I was quick to follow; it worked well, but primarily for the novelty value of customers asking me to explain QR codes as it enabled me to get right into a good conversation on mobile commerce with potential and existing customers.

I recount that story in order to introduce the purpose of the article below.

The real game in mobile commerce (and mobile payments specifically) is less about the specific technology protocol for transmitting data between the phone and the point of sale, and more about using the mobile to provide an experience above and beyond what travellers can get today.

The NFC angle

There was a recent article on Tnooz by Stephen Vadepool on why Near Field Communication (NFC) is so important to the travel industry, and whilst few would deny NFC has the potential to radically alter the payment experience, it is just one of a number of sometimes competing, often complimentary technologies that will drive m-commerce.

NFC in mobile payments today currently has some clear strengths, especially related to the secure element on the phone, the status of card present transactions when using the phone for proximity payments and the subsequent associated liability shift; but the most interesting story is in the digital wallet underpinning one of any number of communication protocols and methods used at the point of sale – be that NFC, QR codes, sound, bump, bluetooth, Xbox Kinect or whatever else someone comes up with.

Consistency of experience is key, and the wallet underpins this consistency regardless of the protocol used.

New openings

One of the most interesting parts of the coming mobile payments revolution is the ability under certain models to create a payment opportunity for the consumer where none exists today.

I was asked by a travel industry conference organiser a couple of weeks ago if I knew of anyone with a strong mobile payments case study, and whilst many are making valiant efforts, I am convinced the really interesting stuff is yet to come – although not as far off as you might think.

When it does come it might not quite go to the extremes of that proposed Dubai hotel which looks like a giant pixelated mess, but don’t rule out QR codes just yet.

Stephen Joyce of Rezgo put them as one of his 2011 Tnooz predictions, and despite my limited embrace in the opening paragraph, I’ve recently seen a greater potential utility for this method as it has the potential to cheaply turn intent/desire media like print, outdoor and TV into instant purchase media.

Other options

Exponentially increasing the points of sale where your product can be purchased must be of interest to any seller.

That said, the true test of any such technology is what benefit does it give me once the novelty value of paying for something with my phone has worn off. How sticky is it really, and what added utility does it offer.

A recent survey quoted in Tnooz claimed printed travel brochures are not dead yet – adding scan codes tied to a digital wallet (a big difference from the way most are used today) would make this claim even more relevant.

Along similar lines, airlines could do a number of things:

• add QR codes and/or NFC chips to each armrest or seatback on wifi enabled planes, revolutionising food service and other onboard sales
• airline website confirmation pages for ticket sales could feature limited time hotel offers (potentially distressed inventory) that could either be purchased immediately by pointing the phone at the screen or more likely offer coupons that would be entered into the digital wallet on the phone just by scanning, thereby increasing the destination content ancillary revenue flowing back to the airline when the person travels.

Following on from this logic, the much-talked about convergence between the mobile and the PC or tablet will be progressed by people using multiple devices during the one session; digital wallets with integrated couponing and that support multiple payment protocols will be one of the drivers.

The day when display ads online will be able to “sell” without registering a click though will be another challenge for some, but an opportunity for forward thinkers in travel. This hypothesising is just scratching the surface.

My advice to people in the travel industry is to at least keep an occasional eye on the innovative payment methods that will come and go as the mobile channel evolves, but to keep an even closer eye on the digital wallets that will offer multiple payment technologies for use across various channels.

The traveller will choose different protocols and methods for purchasing via mobile at various times, but will almost certainly end up using one wallet as the cornerstone of their mobile payments persona – integrating your business with one or a number of wallets (some of which are yet to be launched) will be a key decision for many travel industry executives over the coming year and beyond.