Vacation Nation: Is it Too Soon to Envision a Card-Free Vacation?
Whether taking a staycation, traveling domestically, or traveling abroad, mobile payment platforms provide convenience and peace of mind no matter the destination. Adoption of mobile payments increased substantially during the pandemic, and the ease of use has led to seen sustained usage into 2021. Consumers’ new usage digital payments habits will likely continue as people get out of the house and travel again. The same tried and true features members have relied upon while traveling, such as checking account balances, transaction history, and bill payment, will continue to see usage. Still, newer payment options may take center stage for purchases. And we would be remiss if we did not mention that debit cards, credit cards, and cash still have their advantages when making payments.
While credit cards get all of the love when discussing card payments, debit cards are still the preference for card payments. And, while we are on the subject of debit cards, some destinations may only accept cash, or offer a more favorable price for a cash payment, which is another reason why debit card usage may be higher than credit card usage. Debit card payments require enough funds in an account (let's just avoid the courtesy pay discussion) to facilitate the payment. This may require that the account be replenished using other sources such as a cross-account transfer from another internal account or a loan such as a line of credit. If funds are needed from an external account at another institution, A2A is an option where consumers can transfer funds from an external financial institution account to their checking account. The use of a credit card, debit card, and cash may be inconvenient for the digital purist. Let's see what other options may fit their needs.
When we begin to discuss a total mobile payments experience, P2P is likely to come to mind. While P2P has been primarily viewed as a social payments network where friends and family exchange funds, COVID heightened the awareness that P2P could be used for purchases as well.
With credit cards and debit cards available, why would consumers elect to use P2P? For starters, consider the advantages that P2P offers from our discussion above: it is mobile-centric and can be funded by multiple sources. But, unlike the physical and mobile methods mentioned above, P2P is a one-step mobile payment solution with no physical payment vehicles required (cards or cash). Traditionally, P2P transactions are viewed mainly for online and mobile transactions. Merchants, however, are leveraging P2P payments in-store by providing QR codes where a smartphone user takes a picture of the code, the product is presented, and can be paid for using P2P. This makes P2P a savvy payment method in whatever channel the payment needs to be made. If the smartphone mobile revolution was propelled by convenience, P2P further enhances that experience by offering an actual mobile payments experience. Could mobile payments get any more convenient than P2P? You bet!
Digital wallets offer the maximum convenience for mobile payments. A digital wallet is easy to set up. With push provisioning of credit cards, a consumer can add a new credit card to their wallet as soon as the card is approved. Consumers can also add existing credit cards by simply taking a couple pictures of the card. Since credit cards are now available in the wallet, they can be used for purchases. With a digital wallet, consumers can leave their cards at home, adding additional security and convenience while traveling. And, as an added benefit, digital wallets are a contactless form of payment enabling payments without the physical exchange of cards.
Digital wallets can hold other subscription-based accounts as well, like frequent flyer and hotel points. Imagine a scenario where a person checks in at a hotel, accesses their hotel points in the digital wallet, partially pays for the hotel room with points and the balance with a card stored in the wallet.
Today, consumers have a wealth of convenient payment options. Since their smartphone is always with them, payment options within the phone make it the ultimate traveling companion. Regardless of the form of payment a consumer wants to use, their mobile device plays a role in that decision. From checking available funds, transferring money to funding accounts, paying bills, or making digital payments, the mobile device has it all. Today’s smartphone creates an experience where mobile users can make smart decisions when considering their payment options.