New payment rules needn’t come at the traveler’s expense

Stefan Ropers

President, Strategic Growth Businesses, Amadeus

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Last year, my friend’s credit card was charged with hundreds of dollars for a flight to the US he had never booked. Thankfully, he realized what was happening and managed to contact his bank to have the transaction cancelled. But the entire experience was stressful… Would he get the money back? Would it take a long time?

Unfortunately, this situation is far too common in the world of e-commerce, and I’m sure that either you or someone you know has experienced a similar situation. In fact, the European Banking Authority estimates card fraud represents €1.8 billion a year across Europe.

According to our own worldwide research with travelers, over 70% of respondents told us that a secure payment experience is more important to them than a quick and easy payment, when it comes to booking travel. Therefore, it shouldn’t come as a surprise that Strong Customer Authentication (SCA) has been conceived, and now partially implemented across Europe, as part of the Payment Services Directive (or PSD2).  

SCA mandates that travelers prove their identity by providing additional information about themselves, a process known as ‘two-factor authentication’.

So, from now on, when you buy travel online, you will likely be asked to provide your card details alongside a password, as well as a one-time code sent to your mobile phone by your bank. If you are using a mobile device, biometrics such as your fingerprint or your face scan are also likely to be used to authenticate you.

There is no doubt that, at the beginning, this new process is going to make the purchase slightly more tedious. However, over time, travel players will adopt tactics to improve our purchasing experience and, whenever possible, to limit friction.

One way the industry is already moving to reduce friction is merchant whitelisting. Next time you check out online, you might be asked if you wish to add the retailer to a whitelist. If you say yes, then the travel retailer is added to a ‘whitelist’ administered by your bank, which means you are free to buy from that retailer in the future without going through the SCA process. 

In the coming years, we will continue to see new ways to improve online payments. But these innovations will have security and fraud prevention as core features, which I know will give me a greater sense of comfort and will reduce the stress associated with travel for many people.

Strong security is one of the key reasons that e-Wallets have become increasingly popular in the digital world. As the security underpinning cards continues to improve with the introduction of SCA, it will be interesting to see if travelers increase card usage, or if the growth in e-Wallets continues. 

No matter how the traveler chooses to pay, at Amadeus we’ll be working closely with our customers across the travel industry to make sure it’s a smooth and stress-free experience.

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