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Four reasons why African travel companies must accept digital payments

Despite the trend for securing accommodations and travel online by Western travelers, African travel companies have yet to fully embrace online bookings and payments.

An Increase in International Travel to Africa
Today’s international traveler is looking to experience new cultures and create unforgettable memories.  It is therefore not surprising that travelers are increasingly flocking to Africa.  From dramatic vistas of extraordinary wildlife to a varied cultural population, Africa is a prime vacation destination.

The 2015 travel and tourism GDP in Sub Sahara Africa grew 3.3% and the 2016-2026 outlook for that region is 5.2% growth, according to the World Travel and Tourism Council.

The African Tourism report found that the US, the UK and France collectively make up 60% of the international travel to Africa, and the demand from these countries rose over 25% for the period analyzed.

This demand is affecting all facets of the African tourism industry, from hospitality to local attractions.  Proof of this can be seen in the increase of hotel rooms under construction across the region, up to 64,000 rooms in 365 properties in 2016 from close to 50,000 in 2015, with significant growth in the Sub Saharan regions, according to the W Hospitality Group.

Africa has not Embraced Digital Payments
As 60% of African tourism comes from the US, UK and France, it is important to understand the booking habits of these crucial markets.  According to PhoCusWright, by the end of 2017, 52% of all travel bookings in Europe will be done online, and eMarketer has found that close to 70% of Americans will use mobile for travel bookings in 2017, with continued growth projected.

Despite the trend for securing accommodations and travel online by Western travelers, African travel companies have yet to fully embrace online bookings and payments. 

One of the reasons online bookings are still lagging in Africa is Africans fear of fraud.  Africa has the highest rate of attempted online fraud, at 4.3% compared to 3.6% in Europe and 1.6% in North America.  However, with the increase in international tourism, African hospitality and tourism providers need to understand that fraud happens both online and offline, and the risk of limited exposure to their target audience can cause greater harm than staying in the presumed safe harbor of offline payments. 

With tour and activity providers finding that implementing an online booking service leads to an increase in bookings, there is good reason to integrate online booking and payment services sooner rather than later.  Furthermore, as today’s online payment platforms offer a highly secure medium for companies to market and sell their services internationally, the benefits are clearly higher than the minimal risks.

African Tourism Companies will benefit from Digital Payment Implementation
African hospitality, travel and tourism providers will benefit from integrating online payment platforms.  The following are the key benefits these companies can expect:

1. Higher security
Integration of online payments from payment service providers (PSPs) which comply with PCI DSS level 1 standards offer the highest level of protection against online fraud for businesses.  Additionally, these companies often provide additional services such as, real-time monitoring by risk management teams, algorithms that identify security breaches and updated blacklists, which add another layer of protection. 

Customer payment details are not stored locally, ensuring a highly secure method for payment.  Travelers, both local and international, will feel safer knowing they are dealing with a company that offers this high standard of security, increasing the likelihood of bookings.

2. Increased sales
As shown above, there is a growing trend for travelers to book online, especially travelers from Europe and North America.  African companies who embrace online payments will be privy to the ever-expanding market of local and international travelers, enjoying increased bookings and revenues. 

3. More flexibility in payment acceptance
Travelers to Africa come from various international countries.  Digital payments allow travel companies to accept a wide range of credit cards, mobile payments and alternative payment methods, providing increased flexibility to the customer.  Online payment platforms also facilitate cross-border payments and the acceptance of different international currencies, offering customers the flexibility of paying in their own currency.

4. Improved customer loyalty
Secure, simple and efficient online payments play an important part in ensuring customer satisfaction.  Satisfied customers are the basis of return visits and positive online recommendations, leading to increased sales in the future.

Key Takeaways

  • With the ever-increasing move to online bookings, travel companies worldwide must integrate digital payments in order to strengthen exposure in their target markets and close deals.
  • Africa has the lowest level of online retail in the world, often due to fraud concerns.  However, offline payments present their own fraud risks. Digital payments are highly secure, offering protection to customers who book online. 
  • As there is a growing trend for international travelers visiting Africa, companies must embrace digital payments so as not to miss out on this market opportunity.
  • Online payments are highly convenient leading to satisfied customers who are likely to return in the future and refer their peers.
  • Companies that take advantages of the benefits digital payments offer will enjoy increased bookings and revenues.

 

Founder - 3G Direct Pay Group | + Posts

Eran Feinstein is the founder of  Direct Pay Online, a global e-commerce and online payments solutions provider for the travel and related industries. With over 14 years of experience leading technology, sales, marketing and operation teams, Eran is an authority in the East African e-commerce and payments arena. He's also an avid marathon runner.

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