//Business travel report: The digital payment revolution

Business travel report: The digital payment revolution

Mobile payments are becoming the new normal as travellers shun cash in favour of digital wallets while abroad – and at home, writes Jenny Southan.

How much cash do you have on you right now? For many people, reliance on a digital wallet is becoming the new normal. It’s more secure and more convenient, and as a result, many countries such as the UK are rapidly moving towards becoming entirely cashless (this could be as early as 2026, according to the 2019 Access to Cash Review). British Airways stopped accepting cash on short-haul flights in 2017 and, in many cities, including London, coins and notes are not accepted on public transport. A rising number of restaurants, bars and shops are refusing cash, too. Last year, 4,735 ATMs vanished from the streets.

Brits aren’t the only ones shunning this analogue way of spending: in Sweden, six million people (just over half its ten million population) use virtual payment app Swish, and only 13 per cent said they had used cash on their most recent payments in a nationwide 2018 survey by Sveriges Riksbank. While the US is more beholden to its dollar bills – 53 per cent of Americans say they try to always carry cash in case they need it (Pew Research Center, 2018) – other countries such as South Korea and Canada are racing towards ditching physical currencies almost completely.

Even though it was China that first introduced paper banknotes back in the seventh century, it is this country that is leading the way in the digital payment revolution, going beyond plastic debit and credit cards to rapidly adopting contactless mobile payments. According to Worldpay’s Global Payments Report 2018, “China presents a payment landscape shaped by consumers that came of age in a digital and mobile-first world. Mobile wallets dominate Chinese payments unlike anywhere else on the planet. Almost two-thirds of eCommerce and more than a third of point-of-sale spend in China is made through leading e-wallets such as Alipay and WeChat Pay.”

To put it into perspective, last year, there were 127 million Apple Pay users around the world, compared with 500 million Alipay users and 900 million WeChat Pay users. And yet when hotels such as the Savoy in London and Plaza Premium lounges at Heathrow introduced the technology, they sent out press releases announcing the news. The reality is, every company that engages with international travellers should be allowing for these kinds of payment methods.

Not just for simple one-touch transactions in shops and restaurants, Alipay, for example, has become an all-round ‘lifestyle enabler’. People can use it to hail taxis, book hotels, pay utility bills and make appointments with their doctors directly from within the app. A 2018 report from Nielsen and Alipay titled Trends for Mobile Payment in Chinese Outbound Tourism found that out of a survey of more than 2,800 outbound Chinese travellers, more than two-thirds (69 per cent) paid with their mobile phones while abroad, up four percentage points from the previous year, while 32 per cent of transactions were mobile payments, overtaking cash for the first time.

For travel companies, ignoring these new ways of spending is unwise, especially when it comes to business travellers who travel more frequently than the average person. According to 2018 data from Barclaycard, two thirds (66 per cent) of travel buyers anticipate that use of digital wallets will increase over the next five years. People are also turning to digital- only banks such as Monzo, Mettle, Tandem, Tide, Starling and Revolut, which don’t charge foreign transaction fees and have attractive app interfaces with graphs and charts to display expenses.

Technology – and consumer adoption of it – is accelerating in previously unimaginable ways. Amazon Go stores, for example, don’t even require customers to queue and tap their smartphone at a paypoint; they can just walk straight out with their groceries. (After setting up an online account, payments will be taken automatically via a network of cameras and scanners that process what people are taking off the shelves.) At the moment, Amazon Go marts are found in Seattle, San Francisco, New York and Chicago, but there is speculation that they will come to airports, too.

Just when you think you have enough to consider with e-wallets, digital banks, check-out-free stores and the rise of China, the travel industry also needs to prepare for cryptocurrencies to go mainstream. There are currently more than 1,600 different cryptocurrencies in circulation, but more are being created all the time (some of the most popular ones include Bitcoin, Bitcoin Cash, Dogecoin, Ethereum and Litecoin). Just as savvy travel companies are integrating Alipay and WeChat Pay for Chinese travellers, they may also need to consider accepting cryptocurrency payments for everything from flights to room service.

Earlier this year, Corporate Traveller, a division of one of the largest travel companies in the world, Flight Centre Travel Group, began accepting cryptocurrencies from SMEs through a partnership with BitPay, which only charges 1 per cent on transactions, making it cheaper than credit cards. And at the end of last year, a new app called Tripio began enabling Ethereum holders to book hotel rooms at more than 450,000 properties around the world, including the Marina Bay Sands in Singapore and the Ritz-Carlton in Tokyo. But will business travellers still need a wad of notes for tipping staff?