Transforming the efficiency of bizav payments
PayNode Global Business Director Magnus Henriksson considers how new technologies will improve the pain points in the industry’s payment flow.
As with every other area of life, business aviation is changing rapidly through the advent of new technologies. Rapid advances in e-commerce and online customer experience in other sectors have raised customers’ expectations of the air charter industry: they want services to be delivered quickly and securely in a real-time, digital environment.
Payment processes have been slow to catch up
The travel industry works hard to embrace new technologies, transforming its online presence with new ways to engage with customers, but payment processes have been slower to catch up. In late 2016, research published by Phocuswright showed that although some 35% of travel customers are ready to use digital wallets and mobile devices to make bookings, fewer than 20% of bookings are actually made using this new technology. This slow take-up acts as a drag on cash flow for travel businesses. In fact, 24% of agents and brokers with a turnover of more than 10 million Euros still process transactions and invoices manually.
The last decade has seen new technology begin to change business aviation in the same way as the wider travel industry. The successful launches of JetSuite and Victor, companies that offer mobile phone apps and web-based bookings for private aviation, are one indication of the industry’s future.
Bringing payments platforms to bizav
Avinode created a premier B2B online marketplace for business air charter, and continues to develop solutions that help our members transact more efficiently and profitably.
We recognized that another area ripe for improvement was the industry’s processing of charter payments. The prevailing methods are inefficient, costly and insecure, placing unnecessary strain on brokers’ and operators’ businesses, and giving customers insufficient protection of their payment details. Long clearing and settlement times often see brokers and operators providing services without the certainty that they will be paid, particularly for short-notice and weekend flights.
As a response to customer input and the realization that the payment procedure is a true industry pain-point, last year we launched PayNode, a payment service specifically designed to address the challenges of business aviation.
PayNode is a service that helps to improve the security and guarantee of air charter payments. It works by safely speeding up the clearing and settlement of transactions between clients and brokers, and between brokers and operators. PayNode works the same way as PayPal does for e-commerce, providing a secure payment environment for the purchase and delivery of private aviation services. In place of slow processing times and the exchange of credit card and personal data over insecure channels, PayNode lets users clear and settle transactions quickly and securely. This frees up cash to be invested in the business, rather than being used to cover the slow clearing and settlement of client payments.
PayNode is just one way in which business aviation is moving into the twenty-first century, keeping pace with clients’ rising expectations. Early adopters of PayNode in the US have already seen significant internal efficiencies and savings. These benefits will this month become available in Mexico ahead of its European launch in June.
As the next step in PayNode’s development, we will soon also launch a bank wire transfer solution which will truly be a game-changer for the future of business aviation payments.