Airlines are a paradox of mobile expertise. They handle check-ins, boarding passes and other key functions through their apps, but are not as full-featured when it comes to handling sales over phones and tablets.
Some companies are working to improve things by bringing third-party wallets such as Apple Pay on board the flight; Cellpoint Mobile is taking a different approach by bringing those wallets to the interactions where mobile is already most popular. It lets passengers book flights or initiate upgrades with Apple Pay, Android Pay or Samsung Pay.
Cellpoint Mobile is no stranger to the airlines' payments ecosystem. The London-based business continues to work on enhancing in-flight payments through an onboard WiFi signal communicating with a virtual card the passenger would use only while inside of the plane. Cellpoint announced that development about five months ago, targeting it for use in early fall.
Airlines are becoming increasingly interested in options for digital payments on flights, with Frontier Airlines moving in that direction, while JetBlue has been supporting Apple Pay payments on some of its flights.
But Velocity targets a digital travel sales industry that Cellpoint estimates can reach $762 billion by 2019 where it starts -- when the passenger is viewing flight options on a mobile device. As such, the airlines have to adapt to a mobile-first marketplace, said Kristian Gjerding, CEO of Cellpoint Mobile.
"Velocity is not a niche product, but a response to a changing environment in consumer payments," Gjerding said. "Consumers typically have multiple merchant relationships, whether it is an airline, rail company or grocery store. And they have a technology choice they have made with their devices, and we are looking to make it easier and quicker for the airlines to respond to that."
Cellpoint Mobile offers three levels of Velocity service called Engage, Accelerate and Advance, with each level allowing airlines to accept more payment methods and add service features. Engage allows a rapid rollout of two major mobile wallets, while Advance integrates up to 10 payment methods per market and full reporting capabilities.
By targeting the airlines industry, Cellpoint Mobile is among the vendors that see an opportunity in gaining expertise in specific verticals, said Thad Peterson, senior analyst with Boston-based Aite Group.
"You have Cellpoint looking at airlines, and many others looking at health care and other industries," Peterson said. "What they are doing is combining payments facilitation with knowledge of the category so they can deliver customized solutions."
Such a strategy differentiates a provider from those that just offer domain services, Peterson added. "It takes a lot to understand the airline industry, and payments have to be integrated into all components of it, so it is important to have that expertise."
Much like the major mobile wallets, Velocity seeks to operate "under the hood" of the airline's network, making it easy for passengers to pay with their preferred mobile app.
"We already have integration on the back end to the processors and acquirers needed to support these payment methods," Gjerding said. "The key here is providing consumer choice and allowing those who have a tight relationship with their tech providers to use those wallets in a simple pathway to a purchase."
The software-as-a-service product integrates with specific airlines needs, such as the reservation, booking and reconciliation engines, as well as specific instances when a passenger is upgrading seating, or changing a flight, Gjerding said.
"It's not that an airline could not do these things before Velocity, but it was very complex and we just make it easier to get it all in one channel and get to market faster," Gjerding said.
Value-added services that allow a merchant to more easily accept mobile payments will continue to be a major trend in payments, said Marc Cochrane, an independent payments analyst and adviser.
"For the airlines, they can make it simpler by knowing the customer's TSA standing and seat preference and just add mobile payments to clear that technology haze for buyers to get through," Cochrane said.
Younger consumers are likely to be the first to appreciate an upgrade in airlines payment acceptance, but they are not the only demographic that will be receptive to this type of offering, Cochrane added.
"There are thousands of flights every day and a huge consumer mix involved from business, to leisure to emergency travel," Cochrane said. "Making it all easier for mobile will be very important."