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Simplifying The Group Payment Arrangement for Airlines

Group Payment Arrangement: The Solution to Cart Abandonment for Airlines

We've all been there - fantasising about booking flights with friends and family only to realise the costs of flights are higher than expected. No one in your booking group wants to be the lead booker and front the cost, so you all decide to take a raincheck and leave the trip as a pipedream.

This is all too common in the aviation industry, as there is a 90% abandoned cart rate. This is even more staggering given the average abandoned cart rate across all industries is 70.19%. This presents significant lost opportunities for airlines and revenue that has never come to fruition.

“But what does this have to do with group payments?”

The advantages of group payments for airline customers

Despite the popularity of solo travel, people still frequently travel in groups, with holidays being seen as the perfect time to visit friends and family. In fact, 40% of millennials planned to travel with friends between 2022-23. 

Group bookings often consist of families who are travelling in large groups of adults, with 70% of Gen X stating holidays are ‘family orientated’. In short, group bookings are the foundation of the aviation industry- yet are not accommodated for in payment processes. Paying as a group can be very inconvenient, especially for the lead booker, who must either wait for funds to be transferred before paying or foot the bill upfront- both of which can be off-putting.

This is where Hands In’s group payment arrangement comes in, allowing for payments to be split between a group. Rather than making lead bookers chase the funds- negatively affecting their customer experience due to upfronting these high costs and being left out of pocket- each group member is responsible for paying their share.

Why are split payments the future in merchant services for airlines?

By removing the frustrations of splitting payments as a group outside of the checkout, users benefit from a streamlined user experience, leading to less abandoned carts.

This naturally has a direct impact on revenue, meaning that more transactions are completed successfully and less carts being abandoned due to frustrations with the paying process or lack of funds. Overall, this is a much more positive customer experience, leading to higher rates of customer satisfaction.

Diagram showing how the legacy group booking process slows merchants down

You must be wondering why this hasn’t existed before. Well, it does in a legacy format, but these methods are far more labour-intensive than our group payment arrangement. Take easyJet’s group payments model, for example.

This involves multiple teams, six steps, and is catered towards larger bookings of around nine or above. This is costly for the airline and logistically difficult as multiple teams will need to be in communication over this single transaction.

Our group payments tool creates a digital experience that reduces these costs because airlines don’t need to use a direct sales channel. So, group payments not only add revenue and improve the booking experience, but also save money for airlines as the manual chasing of payments and reconciliation is all done in a real-time system. Not only this, but our solution is just as easy-to-use and effective for a group of three as it is for a group of nine and above.

British Airways also has a group payments function, but this has a minimum passenger number of 7 passengers, again failing to accommodate for smaller groups. This is a significant issue, as 59% of Gen Z and Millennials travel in groups of 3 or more. An issue which our group payments innovation addresses in full.

Steps showing how the pay per person process works

We can see Qantas is beginning to take notice of the demand for group payments in the image above. Their ‘Pay Per Person’ model works in a similar way to our group payments, which we’re delighted about, as it shows the group payment arrangement is beginning to gain traction in the aviation industry. Other airlines will begin to follow suit, leaving us in the perfect position to facilitate this.

How does a group payment arrangement work when booking flights?

A diagram showing how group payment arrangements work when booking flights

1.        The lead booker can select the option to pay as a group natively within checkout.

2.        They then invite the other members of their group. This can be done by SMS, Email, QR code, or by sharing a link.

3.        The merchant will set a deadline for all members to pay via their chosen method and Hands In will do the chasing with payment reminders.

4.        Customers can then split the payment by custom amounts or simply split it equally between them.

5.        Each customer joins within the booking window to pay their individual share.Hands In collect these funds and seamlessly transfer them to your connected payment infrastructure within the selected timeframe.

6.        The merchant receives real-time payment alerts up until the transaction is completed.

Not only this, but the merchant also has the option to white label this solution, making their brand and merchant services synonymous with innovation.

We are piloting this solution with a major Spanish airline that is part of the International Airlines Group, and we will have more data to follow.

To see how you can take the churn out of your payment process and watch your revenues incrementally increase, book a no-obligation demo with Hands In here.


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