Tnooz-Wex webinar: Maximize your bottom line with an optimal payments
Transcript of Tnooz-Wex webinar: Maximize your bottom line with an optimal payments
Your presenters
Ian JohnsonDirector, Sales, Virtual PaymentsWEX Europe
Steve EndacottNon-Executive ChairmanTeletext Holidays
Lee JacksonStrategic Sales ManagerWEX Europe
What’shappeninginthetravelindustry?
Wherearepeople travelling?Howaretheygettingthere?
Whatdoesthismeanforpayments?
Wherearepeopletravelling?
Consumersareincreasingnumber oftripsanddrivingdemandforcustomised packages
Holidaymakers seekmorevariedexperiences,including newdestinations,multi-centre,andactivityholidays
Thedestination landscapeisvolatileanddestinationchoiceisimpactedthroughglobaleventsandchangesinperceivedsecurity
Customers are spending more and demanding more
LowCostCarriersofferagrowingindependentandflexiblenetworkforleisuretraveloperations
Howaretheygettingthere?
LowCostCarriers(LCCs)aregrowingcapacityversusLegacycarriers
ServicelinesbetweenLegacy&LowCostCarriersarelessclear
LCCslinked totradeandbusiness through GDSandonlinebookingplatforms
Howaretheygettingthere?LowCostCarriers’ShareoftheEuropeanAviationMarket
LCC
Legacyandcharter
*DataProvided byOAG
64%
36%
RyanairOthers
Howaretheygettingthere?
LowCostCarriers(LCCs)replacingcharterservicesfortouroperating
EmergenceofLowCosttouroperations
LCCsofferstheLeisureTravellerinbound&outbound choice
Europe’sTopSixLowCostAirlines
Ryanair
easyjet
NorwegianAirShuttleVuelingPegasusAirlines
germanwings
Others
Whattravelindustrydevelopmentmeansforpayments
SUPPLIERACCEPTANCENon-contractedpayments
CurrencyFluctuationFXFees&Surcharges
PROCESSPRESSURERetainandincrease
automationImpactonsalestime
Cashflowpressure
SECURITYCONCERNSProtectingconsumer
dataExposuretomerchant
fraud
GROWTH&DIVERSIFICATION
LCCMarketindetail
generatedoncreditcardsurchargesperyearonlyinUKEdgarDunn&Company
GrossbookingsforLCCswillexpandby
26%from2013to2016PhocusWright, 2015
£300m Regulation• EuropeanTravel
Package• ATOLScheme
intheUK
ConsumerbehaviourMetasearch engineusageisexpanding.Priceiskey
ChallengesfacedbyTeletext holidays
Pressuretostaycompetitive withnomoneyleft inair
Profitability&competitiveness Regulatoryimpactoncashflow
Beinginnovativeinfindingwaystosavemoney
Focusingonmaximisingperbookingprofitability
Travelbecomingmoreregulated
Trustfundpiecerequiredbylegislation
Strugglingtomaintainpositiveworkingcapital ingeneral
Pressuretostaycompetitivewithnomoneyleftinair
Costof2%forairlinesurcharges
Metasearchincreasingandrankingisbasedonpriceoffered
Howtokeepcostsdownandmaintainmarketshare
Consumerslookingforbargainsandcomparingeasilyonline
Maximisingperbookingprofitabilitythroughsplitflying
CheapestwayisbuyingoutboundinGBPandinboundinEUR
AirlinesusedfixexchangerateswhichpayinginEURavoids
Thisisonlypossibleoncorporatecards,notconsumercards
ReconciliationofsplitflyingneedsVCN’sautomaticreconciliationfunctionality
Trustfunds
UnderFlightPlustheCAAseektoputtheretailerinthefrontlineifanairlinecollapsesandmakethemresponsibleforreplacingflights
UsingVCNsheremeansarechargeincaseofairlinefailuretoensurecustomersgettheirmoneyback,viathe“nonproductdelivery”mechanismbackintothetrustfund
Rechargingcardsischeaperthansupplierfailureinsurance
Customer’smoneyiskeptintrustaccountforupto5businessdays
Maintainingpositivecashflow
TrustfundworkflowmeansOTAsareoutofpocketforupto5days
Airlinerequiresimmediatepayment
Needprepaidproducttoavoidsurcharging
OTAshavenoorverylittlecashtoplaywith
WEX’ssolutiontohelpTeletext
AirlinePaymentsTop3Concerns
Avoidsurcharges
Minimise forex fees&risk
Maximise cashflow
SolutionforAirlinePayments
1
2
3
Acreditfacility
debitcardattributes
multicurrencycapabilities
Prepaidfundingvs creditfacility
Prepaid Credit
Account fundingby Customer WEX
Surchargeavoidance ü ü
Currency capability ü ü
Reduceadmintime û ü
Automated funding û ü
Positive cashflow û ü
Creditfacility û ü
SolvingtheproblemwithWEXAirlinePayments
How WhyPayairlineswithdebitVCNstoavoidsurcharges
Save2%perbooking: £8per£400flight
Increasesalesthroughmorecompetitivepricing
Improveperbooking profitability
Payandsettleinmultiple currencieswithoutFXorconversion fees
Usecreditaccountto:
Payairlineimmediately
Avoidbeingoutofpocketwhilstcustomerfundsareintrustaccount
Increasecashflow
HowDoesItWork?BEFORE
CustomerbooksflightwithOTA
Customer’smoneygoesintotrustaccounts
OTAgetscustomer’smoney
5days
OTAisoutofpocket
OTAusespre-funded debitcardtopayairline Avoidssurcharge=2%costsaving
5da
ys
HowDoesItWork?AFTER
CustomerbooksflightwithOTA
Customer’smoneygoesintotrustaccounts
OTAgetscustomer’smoney
5days
OTAhasimprovedcashflow
OTAfundsdebitcardfromcreditlinetopayairline Avoidssurcharge=2%costsaving
5da
ys
MajorEuropeanCurrenciesAvailable
MajorEuropeancurrenciessupported
NoFXriskandnofx orconversionfees
Billingandsettlementinsamecurrency
Saveupto2.5%oninternationalpayments
TotalcurrencycoverageofEuropeanLCCmarket
Globallyatotalof22billingcurrencieswithtransactionsoccurredinover45currenciesand190countriesworldwide
ExampleBusinessCase
Averagebookingvalue£400
Totalspend£50m
85%
125,000bookings/year CreditLine(10-dayterms)
£2m
Surchargeperbooking£8
NOFXfees15%
Overview
GrowthofLCCs
Keychallenges
SolutionforAirlinePayments
Profitabilityandcompetitiveness Regulatoryimpactoncashflow
2%savingperbookingEnhancedcompetitiveofferingandperbookingprofitability
PayinmultiplecurrencieswithoutFXorconversionfees
Thank you!
Send your questions and comments to [email protected]
Replay and presentation will be available on www.tnooz.com