Cebu Pacific, the Philippines-based low-cost carrier, is in the process of transforming its payments ecosystem by implementing a Payment Orchestration Platform, with the help of its technology partner CellPoint Digital. With payment orchestration in place, Cebu Pacific expects to streamline the payment process for its passengers, and reduce its per-transaction costs through dynamic routing.
Payment orchestration has been a trending topic in aviation circles, and Cebu Pacific’s decision to implement a payment orchestration platform at this time illustrates why this kind of unifying solution is so beneficial to airlines.
Cebu Pacific’s unique position
Cebu Pacific is one of the most successful low-cost airlines in the world, having flown over 22 million passengers to over 60 destinations in 2019. Operating since 1996, Cebu Pacific has a reputation for innovation; it was the first airline in the Philippines to introduce web check-in, E-ticketing, and seat selection, and recently launched a ground-breaking sustainability initiative called the Juan Effect.
Meeting customer payment expectations
As the Philippines’ largest airline, Cebu Pacific enjoys a direct relationship with its customers: 70% of bookings are made via the carrier’s direct digital channels. With such a large percentage of seat sales coming from the Cebu Pacific website and app, streamlining the booking process in those channels is imperative for the airline. This year, they identified the payment phase as a target for optimisation.
As the last step in the booking process, payments are often an inflection point for a prospective traveller. Making payment as frictionless as possible reduces cart abandonment and increases conversions, which translate directly into topline revenue for airlines like Cebu Pacific. Reducing friction involves implementing features that are commonplace in many ecommerce settings, like one-click payments or support for alternative payment methods that are preferred by the customer. Cebu Pacific, which emphasizes constant improvement of the customer journey, decided to implement a Payment Orchestration Platform to achieve these payment process optimisations.
What is Payment Orchestration?
Put simply, payment orchestration unifies all components of a transaction under a single control layer. It synchronises the flow of transaction data and currency across channels, links these with existing systems, like reservation systems or loyalty programs, and harmonises any differences in format. It then facilitates the rapid deployment of new payment methods to meet customer expectations and preferences in various markets.
The specific Payment Orchestration Platform being implemented by Cebu Pacific will drastically simplify the payment experience of its repeat customers by deploying stored cards in all its digital channels with a single sign-on. Customer satisfaction and conversion will also be boosted by pay-by-link messages that re-engage customers who leave at check-out, and by a Multi-Currency Pricing feature that offers international travellers the option to pay in their preferred currency. This allows the airline to provide its passengers with a streamlined, secure and convenient omnichannel payment experience.
Payment ecosystem benefits
Cebu Pacific’s passengers aren’t the only beneficiaries of payment orchestration; the airline will enjoy significant back-end advantages as well. The payments ecosystem is extraordinarily complex for cross-border merchants like Cebu Pacific, along with all other airlines. All transactions must be routed through a network of PSPs and local acquiring banks, incurring various costs and interchange fees along the way. Conventional approaches to managing acquirer relationships and back-end processes, like chargeback reconciliation, invite inefficiencies; but payment orchestration unifies these processes and optimises them. This will help Cebu Pacific reduce costs while simultaneously making it easy to integrate new alternative forms of payment.
The COVID effect
Cost reduction will be important for a long while to come. Global consumer demand will likely be slow to rebound, so the efficiency and transaction cost minimisation that payment orchestration provides will be key advantages for airlines like Cebu Pacific going forward. And as consumers do become confident traveling again, they’ll expect airlines to support their needs in multiple languages, currencies, and alternative forms of payment – which Cebu Pacific is now equipped to do.
Cebu Pacific’s experience demonstrates that a payment ecosystem that is governed by a Payment Orchestration Platform facilitates a truly omnichannel experience for passengers, and creates valuable cost-saving efficiencies for airlines. This is why payment orchestration is the next great evolution in airline industry, and why forward-thinking airlines are embracing the opportunity to overhaul their payments processes in an intelligent, unified way.
