POS financing makes friendly skies friendlier

Family vacations to Disney World. The trip to a best friend’s destination wedding. The one-of-a-kind getaway on the retired couple’s bucket list.

There are all kinds of reasons why consumers want or need to travel. And while the motivations for hitting the road may vary, there is a single economic reality for most of those trips:

They are usually large financial expenses for the people who take them.

Whether you’re taking the trip of a lifetime or facing a travel emergency, the impact of the travel price tag can have consumers scrambling to minimize costs by flying in the middle of the night or packing all your clothes in one carry-on bag to avoid baggage fees. Often, it means that the trip may not happen at all.

In these situations, UATP CEO Ralph Kaiser noted in a recent conversation with PYMNTS and Edification CEO Brian Barth, it becomes particularly important to offer a variety of payment methods at checkout, including alternative methods such as installment financing.

“There is a reckoning between the players that they have to do this, and they really want to do this,” he said. “But many of these airlines and hotels are working with legacy systems that are very much like mainframes, so this will require innovation and the ability to partner with technology players.”

Players like Uplift, which, in Kaiser’s words, “have done very well to meet a critical need for financing travel payments.”

And beyond meeting a need, Barth said, the best outcome is when the airline can generate revenue by offering customers a manageable payment schedule that spreads the cost of travel over time, allowing them to travel more and generates additional income for the airline.

front switch

For all the benefits that could be gained from alternative payment arrangements, Barth said, it would be extremely difficult for an airline serving Travellers around the world to independently optimize and integrate its offerings for all customers and markets. Additionally, Kaiser noted, given the nature of airline and hotel technology, building all those integrations one at a time would be an extremely long road for Uplift, or any player working in the travel vertical.

A long and unnecessary road, Kaiser pointed out, because UATP is already built in and can be used as an access point.

“We enable fast and easy integration of Uplift with airlines,” he said. “We’re kind of a front switch.”

Travel, Barth noted, has a host of pieces that are completely unique to the industry. the UATP The pairing, he said, allows Uplift to live up to its core values ​​as a travel finance provider: “Keep it simple, make it work.”

In travel, where thousands of esoteric situations can cause flights to be canceled or refunded, UATP enables a settlement process that not only works, but works seamlessly, securely and consistently, so the flow of payments is not interrupted.

In addition to that infrastructure, Barth said, they can directly offer the win-win financing deals that appeal to consumers and increase the size of baskets.

“There are many lessons from global travel that need to be incorporated here,” he added.

The installment traveler

While many lenders focus on one segment of potential borrowers: millennialssubprime borrowers, students, subprime borrowers: Uplift deals with a little bit of everyone.

“I tell people to stand up on their next flight and look around; all of those people are our typical customers,” Barth said.

Because Uplift uses its own credit scoring analysis, they rate more low-risk and high-risk file customers than typical lenders, Barth noted, because they can better identify risk than FICO. About 80 percent of customers with a 550 credit score will repay their loan, he noted: the challenge is recognizing them.

But installment borrowers are a broader group than those who have simply been excluded from more conventional markets, he added. Some borrowers, for example, face expensive travel on a date that cannot be negotiated. They may have perfectly normal access to credit, but would rather pay in installments than use up most of their line of credit. Or, Barth noted, they have clients booking a $5,000 to $8,000 trip who have super prime credit and lots of spending power, but decide to take advantage of payment installments to upgrade to the “trip of a lifetime, where they do absolutely everything on their list.”

From an airline and hotel standpoint, Barth said, this is all good for revenue. It helps enable trips that would otherwise have been avoided and creates ancillary costs for you to purchase travel insurance, upgrade your seat, or purchase the room with a view.

In addition, Kaiser noted, as much as to travel industry players want to drive ancillary sales and maximize revenue as much as possible, they also want consumers to have a positive experience. A customer who spends seven days looking at a beach instead of a parking lot is more likely to travel frequently and invest in the experience.

“Having options around payments is one way to do that,” Kaiser said. “It gives them a way to have a unique or special travel experience that they otherwise wouldn’t have had. That’s more revenue for the airlines, but it’s also better for people in general who want to explore the world. That’s something I like about this.”

Barth agreed, noting that happy travelers, and those who feel in control of their spending, are more frequent flyers. And finding ways to create products to create happier travelers, he said, is Uplift’s next job. That’s labor intensive, though the efforts will be greatly aided by the $123 million in capital funding. Edification collected at the end of 2018.

“If we can continue to create solutions that work and deliver huge benefits to the industry, we can help travel providers as well as the people who travel,” he said. “Creating those great experiences and memories is why we’re all here.”



On: PYMNTS’ survey of 2,094 consumers for The Personalized Shopping Experience report, a collaboration with Elastic Path, shows where merchants are doing well and where they need to up their game to deliver a personalized shopping experience.

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