BackAmongst a whirlwind of rapidly evolving travel industry trends, flexible payment options like buy now/pay later (BNPL) and split payments have revolutionized how consumers book their trips — and manage their finances. As consumers seek new ways to balance travel budgets, buy now pay later options have emerged as a popular solution, allowing travelers to spread the cost of their trips over time.
The number of global buy now pay later users is projected to exceed 900 million by 2027, emphasizing the growing demand for flexible payment solutions for travel. At the same time, split payments are gaining traction, offering travelers the convenience of using multiple payment sources to finalize a transaction. For travel businesses, adopting these solutions is an increasingly strategic move.
Major airlines like British Airways, Delta Airlines, and United Airlines, as well as online travel agencies (OTA) such as Booking.com, have already integrated flexible options into their offerings.
In today’s guide to split payments and buy now/pay later in travel portals, we’ll explore how these solutions are transforming traveler booking experiences, complete with implementation tips.
Understanding Split Payments and Buy Now/Pay Later in Travel
Before we dive into the benefits, let’s start with the basics: What are split payments and buy now/pay later options? Split payments are a transaction method that enables travelers to distribute the cost of a purchase across multiple payment methods or sources, such as bank transfers, credit card payments, debit card payments, and mobile wallets. They allow travelers to evenly divide expenses or use multiple travel payment methods simultaneously to settle the total cost of a transaction.
Buy now pay later travel payments, also referred to as point-of-sale (POS) installment financing, are a transaction method that enables customers to secure a travel booking but pay in installments — often with 0% interest — to help them avoid the burden of larger loans. As a type of travel payment plan, buy now pay later leverages deferred payment options, where a customer enters a credit agreement with a third-party financial technology (fintech) company and makes payments up until the departure date.
The primary difference between split payments and buy now pay later travel payments is that split payments still require the entire balance of the booking upfront, no matter how it’s distributed, whereas buy now pay later allows for travel installment payments. In this way, split payments allow trip costs to be divided equally (either between multiple payment options or multiple individuals in the travel group) in the moment, while buy now pay later allows trip costs to be divided equally over a longer period of time.
Benefits of Buy Now Pay Later Travel for Customers
At a time when 37% of travelers say price or value for money is the top consideration when planning a trip, and 42% say it’s become increasingly important over the last year, travelers are desperate for savings. Though split and buy now pay later payments don’t offer discounts per se, they do help customers better manage their travel budgets by breaking payments into manageable installments.
More than 80% of consumers said they prefer buy now pay later options for travel because it allows them to keep a cash cushion. This cash cushion allows for stress-free travel planning without immediate payment due at the time of booking. Likewise, travel financing gives customers the confidence to book higher-priced or premium travel options without the automatic financial burden.
Benefits of Split Payments for Travel Portals
What are the benefits of offering split payments in travel bookings? One is increased bookings: 40% of consumers said buy now pay later travel payment plans would encourage them to book. Travel installment payments and split payments provide far greater financial flexibility, making travel more accessible, allowing for enhanced customer convenience, and boosting customer satisfaction.
Improved travel customer satisfaction also comes with higher conversion rates. Offering additional travel booking options, either through time-based installment plans or divided payments, eliminates barriers to purchases and empowers continuous spending. Increased satisfaction can also drive elevated customer loyalty, positioning brands as preferred travel providers.
Implementing Split Payments and Buy Now Pay Later in Travel Portals
With customer payment flexibility for travel on the rise, more providers are looking to join the likes of British Airways and Booking.com and offer their own travel booking financing.
If you’d like to integrate buy now pay later in a travel portal, there are a few steps before you can begin offering flexible payments to customers. Consider these factors for implementing new payment options:
- Select a reliable provider. Implementing split payments or buy now pay later in travel portals will require integration with specialized payment processors or gateways, such as Affirm, Klarna, or the travel-specific Fly Now Pay Later.
- Remain mindful of interest. All flexible payment providers will require a portion of each sale, typically about 3% to 6% of the total purchase amount plus a set fee, so it’s vital to understand if you or the customer will be paying those charges.
- Review integration options. Beyond the travel portal, you’ll want to ensure that your chosen provider can integrate with other facets of your business, such as mobile wallet solutions or customer relationship management (CRM) software.
- Promote via marketing. Once you’ve amplified your travel portal with flexible payment options, it’s essential that you alert current and potential customers through your marketing, utilizing channels like social media and email marketing.
Arrivia’s Expertise in Travel Technology Solutions
Now, more than ever before, travelers are searching for solutions that extend their travel budget.
Transaction methods like split payments and buy now pay later for travel have quickly emerged to better manage budgets; however, they’re not the only tactics to enhance travel businesses.
Arrivia remains ahead of travel industry trends with turnkey travel booking technology and flexible loyalty currency that customers can earn and burn to maximize their travel budgets. We offer the lowest available travel rates, leveraging our ability to negotiate exclusive pricing to enable your business to pass along deep discounts to your loyal customers.
Request a demo to learn more!
