Fintech companies are expanding market share in the travel industry with embedded finance integrations
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The digital shift in the payments landscape has led non-financial entities to enhance the customer experience through the power of embedded finance. The embedded finance space has entered almost every vertical, driven by factors including the modernization of traditional businesses, alternative payments, open banking, money movement, and many more. This trend has also created new growth opportunities in the travel industry. For instance,
- In December 2021, Cover Genius, a global provider of embedded insurance, entered into a partnership with a digital travel platform, Singapore-based Agoda, to offer travel protection for travelers in Thailand. According to Cover Genius’s recent study, around 44% of Thai travelers plan to change their travel insurance due to dissatisfaction with coverage and claims experiences. Moreover, the pandemic compelled nearly 69% of Thai travelers to get travel insurance to protect themselves from pandemic-related issues. Consequently, the partnership is expected to support both companies to expand their market share in the medium to long term.
- Similarly, in December 2021, Nium, a global embedded fintech firm, developed virtual card issuing solutions for travel businesses to make payments to their suppliers. The Nium virtual card will help online travel agencies, travel management companies, travel tour operators, and corporations to manage their productivity and increase sales. These B2B travel cards are single-use, have card limits, include attachments, and matching of booking references to payments with a unique card for individual booking, scheduled card loads, etc.
- Moreover, the virtual card solution will further help digitize their supply chain internal processes, helping the travel businesses increase efficiency. Since the pandemic has stagnated the travel industry, travel businesses may find it essential to improve their productivity with this innovative solution.
- In July 2021, travel booking provider Amadeus partnered with Canadian travel app Hopper to enable integration and seamless distribution of Hopper’s fintech solutions by any airlines and online travel agencies. This partnership will help the travel companies to increase average order value, improve margins, and drive customer satisfaction.
- In February 2021, Southeast Asia’s largest online travel start-up Traveloka started providing “buy now, pay later” services for Thailand and Vietnam markets by collaborating with a bank in Thailand.
- Moreover, the company also launched pay later credit cards with local lenders for the underbanked population in Indonesia. Notably, the new credit powered by Visa platform enables shoppers to avail of offers by Traveloka across travel, lifestyle as well as insurance, and wealth management products.
With the onset of the pandemic, maximum challenges were faced by the travel industry; therefore, these fintech solutions turned out to be critical in driving the travel industry’s growth. As the customers expect a digital-first experience, big brands are either entering into partnership or standalone, providing their customers with embedded, hyper-relevant products. These new products are likely to serve a spectrum of customer needs focusing on choice and flexibility, driving the overall growth of the industry from a medium to long term perspective.
To know more and gain a deeper understanding of the global embedded finance market, click here.