Online travel agencies (OTAs) face a number of challenges in their day-to-day operations, many related to payment processing. Whether it’s high payment processing fees, chargebacks, credit card declines, or regional restrictions on purchases, agencies are beholden to the credit card companies who control their payments. These problems can strain the relationship between OTAs and their customers, with customers often not revisiting an agency after a bad experience that was caused by a credit card company’s policy. This is where cryptocurrency offers an innovative solution. By eliminating traditional credit card payments, cryptocurrency payment processing offers the ability to the solve these problems.
Recently, we saw the possibilities crypto offered to online travel agencies when a client, Sky Tours, started using RocketFuel Blockchain. By accepting cryptocurrencies through RocketFuel, Sky Tours was able to avoid many of the problems OTAs face, allowing them to add additional revenue channels, expand their market beyond regional boundaries, avoid problems associated with credit card payments, and cut out middlemen from their merchant-customer relationship.
Here are some of the pain points they faced and the solutions RocketFuel offered.
5 Payment Pain Points for Online Travel Agencies
OTAs face five core pain points with traditional credit card payment processing.
- High fees. The average credit card fee sits at around 3%. That’s 3% of an airline ticket your agency sold that isn’t going to you.
- High percentage of chargebacks. When a chargeback is called for, credit card companies refund customer money putting the onus on you to investigate whether you or the customer is at fault. This can be time consuming as well as costly when you’ve already paid the airline money for the disputed ticket.
- High credit card decline rates. Credit cards are often regionally bound in a way that doesn’t allow cross-border transactions and limits your market. For example, a customer in Bangladesh has already purchased their flight to New York City. If they decide they want to spend a weekend of their trip in Las Vegas and attempt to purchase a ticket from New York to Las Vegas through an online travel agency, their credit card may be declined because it is from outside of the United States. Moreover, because plane tickets can take as long as 24 hours to process, the customer may not even be notified of the declined charge until after they think they’ve successfully purchased a ticket. In these types of circumstances, your agency is losing out on business because of cross-border transaction limits and the experience leaves a sour taste in the customer’s mouth. They may then blame you for it, despite it being a credit card company policy.
- Delayed settlement of funds. While customer payments are immediately withdrawn from the customer’s account, the payments don’t immediately get put in your account. Transactions have to go through payment processors or gateways. If everything checks out, then the money is deposited into your account. But this can take 1 to 3 days or, for flight tickets, may not even be processed until the flight ticket is used.
- Intermediary fees. If a customer is paying USD to USD, then you’re only deal with the usual 3% credit card fee. But if a customer is paying in a foreign currency, then you’re stuck with foreign transaction fees, as well as conversion fees that can be as high as 4x the actual conversion rate. The same goes with bank wire transfers. The bottom line is all of these fees fall on the merchant not the shopper, ultimately reducing your profits.
Easing the Pain with RocketFuel’s Cryptocurrency Payment Innovations
RocketFuel’s 1-Click Checkout solution offers an alternative payment option that solves most of these problems. This not only expands your market but eliminates the middleman and increases your profit. Here are some of the benefits that Rocketfuel offers:
- Low fees. Rocketfuel offers a solution with exponentially cheaper transaction fees, at only 1%.
- Zero chargebacks. By taking credit card companies out of the equation, you can avoid automatic chargebacks when the customer is at fault. Ultimately, you gain a direct relationship with your customers. Customers can still lodge complaints if there is an error, but rather than an automatic refund that is out of your hands you’ll have the power to investigate their claims.
- No declines. When a customer has crypto in their wallet, they can pay you. There are no regional limitations and it doesn’t matter if a customer is buying a ticket from Bangladesh for a flight from New York to Las Vegas. This means no declines and no hassles with the airline when a customer’s credit card is declined. But it also avoids strain with you and your customer when a decline comes in 24 hours after they tried to purchase a ticket.
- Daily fund settlements. Rocketfuel pays out funds on a daily basis, so you can avoid long delays between the customer paying and your OTA getting the funds. This goes both for crypto and backend processing of international credit cards.
- Allows OTAs to pass the savings to the customer. The travel industry is a cutthroat business where savings is king and customers want the cheapest tickets possible. By using RocketFuel, you save not only with its lower fees, but you also avoid the intermediary fees associated with foreign transactions and currency exchanges. These savings can be passed onto the customer to incentivize them buying from your agency.
- No upfront costs. Rocketfuel offers an easy to integrate, 1-click solution that doesn’t require any additional equipment.
Expand your Market, Lower your Costs, and Improve Customer Relations with RocketFuel
Cryptocurrency is changing the online payment game and offering a solution to problems associated with traditional credit card options in the travel industry. With RocketFuel, your online travel agency can not only leverage crypto by offering more payment options, but it lowers your costs and improves customer relations with a more direct payment solution. Simply put, this will allow you to offer a better customer experience, maintain control over the end-customer relationship, improve your cash flow, lower your costs, and offer an accessible solution that isn’t hampered by cross-border credit card restrictions.
To learn more about RocketFuel and how it can help your online travel agency, contact us for a free demo.