ixaris hotel payment solution

Confidential and Proprietary Information | © 2015 Ixaris System Ltd

12TH NOVEMBER 2015


Akshay JainHead of Product,IXARIS

Daniel GreavesHead of Marketing,AMADEUS PAYMENTS

Hotel Payments Made Smarter 2


Who are we?

Founded in 2002, Ixaris is a leading provider of prepaid virtual cards

Ixaris Solutions specialises in processing travel supplier payments

Fast track 50 business

Ixaris is a privately-held company, funded by leading UK institutional investors



Managing part, post and prepaid virtual card bookingsBenefits of a one-system solution

Today’s discussion

HOTEL PAYMENTS CHALLENGES

Evolution of hotel paymentsComparison of payment methodsChallenges associated with prepaid virtual cards

SMARTER PAYMENTS FOR HOTELS



A PhocusWright study in 2013 showed that online bookings will continue to increase total share of all hotel bookings made. Online intermediaries like OTAs, have greatest potential to expand operations in ‘hotels’ as compared to other markets.

2012

2013

2014

2015

2016

0 10 20 30 40 50 60

6.3

7.1

7.9

8.8

9.8

16.4

17.8

19.6

21.2

22.7

56.9

56

55.8

55.9

55.8

Source: Phocuswright ‘’European Online Travel Overview Tenth Edition”

Current market growth trends

5Hotel Payments Made Smarter

European hotel gross bookings (€B) by channel and online penetration (%), 2012-2016

Onl

ine

Pene

trat

ion

Total37% €88.3

35% €85.9

33% €83.2

31% €80.9

29% €79.6

Supplier-Direct OnlineOTAOther


The evolution of hotel payments

QUESTION: thinking about your hotel bookings, which of the following best describes your view in the future of the agency (commission) and merchant models (net rate)?


The agency model for OTA hotel distribution gains mindshare, if not market share. But travel intermediaries globally continue to book as much hotel volume via the merchant model as always and expect their merchant volume to grow faster than agency volume.

Eastern Europe

Western Europe

0 5 10 15 20 25 30 35 40

27

34

21

22

19

22

32

22

Not sureNo changeAgency will growMerchant will grow

Outlook for hotel booking by contracting model

Source: Phocuswright’s “Payment Unsettled: Cost, Opportunity and Disruprion in Travel’s Complex Payment Landscape”


A comparison of traditional payment types

ADVANTAGES DISADVANTAGES

Improved cash position Manual reconciliation effortExposure to FOREXCost of international bank transfers

Improved cash positionEarn additional rebate

Manual reconciliation effortExposure to FOREXCredit card fraudCost of credit


Bank transfers

Physical credit cards


A better alternative?


For cash rich travel companies, virtual prepaid cards offer a flexible payment method that enables Online Travel Agents to pay a wide range of suppliers through globally accepted virtual cards. You maintain complete control over the card characteristics and you can easily track and reconcile all purchasing activity.

BENEFITS

STREAMLINE RECONCILIATIONAutomate reconciliation and save time and costSAVE ON FOREX FEESLoad funds in a range of different currenciesREDUCE FRAUD Card spend is limited to the cards loading valueCREATE ADDITIONAL INCOME Earn revenue through card payment interchange


How do you currently make payments for your hotel bookings?

Poll 1

a) Virtual card or virtual account number

b) Automated payment without billing

c) Direct billing with automated payment

d) Direct billing with manual payment

e) Credit card

f) All of the above


QUESTION: What payment method does your company usually use to settle payments with hotels for merchant (net rate) bookings?

Although a popular means for purchasing flights, the widespread adoption of virtual cards specifically for the settlement of hotel bookings is yet to happen.

Limited adoption of virtual cards

Credit card

Direct billing with manual payment

Direct billing with automated payment

Automated payment without billing

Virtual card or virtual account number

0 10 20 30 40 50 60

57

38

31

25

7

38

43

44

25

4

WholesalerRetailer

16% of larger agencies ($25m+)

typically use a virtual card


Payment methods used to settle merchant hotel booking

Source: Phocuswright’s “Payment Unsettled: Cost, Opportunity and Disruption in Travel’s Complex Payment Landscape”

Virtual card or virtual account number

Automated payment without billing

Direct billing with automated payment

Direct billing with manual payment

Credit card


Which of the following challenges do you face while making payments to hotels using virtual prepaid cards?

Poll 2

a) Single-cards fail when the hotel tries to charge the card more than once

b) Difficulty handling virtual prepaid cards for making future bookings

c) Difficulty in retrieving unspent funds from cards after final payment is taken from the hotel

d) Managing cancellations, changes in bookings, refunds on virtual prepaid cards

e) All of the above


Challenges of using virtual cards


PRE-PAID BOOKINGS

OTA pays the hotel at the time of booking (non-refundable)

In this scenario, if the hotel pre-authorises a ‘single-use’ card, it will fail at the point when the main payment is collected.

POST-PAID BOOKINGS

OTA pays the hotel closer to the check-out date (refundable)

An inability to schedule the loading of funds can lead to lost cash flow / difficulties manually tracking the payment

PART-PAYMENT BOOKINGS

OTA is required to make a part payment at time of booking and rest of the payment at check-out (refundable)

Multiple purchase are prevented by single use cards. Even where ‘multiple-use’ card functionality exists, it can be difficult to delete the card and retrieve unspent funds.

BOOKING TYPE DESCRIPTION CHALLENGE


Prepaid bookings (non-refundable)


1. IMMEDIATE PAYMENT:Select a single-use card and load the full booking amountSend the card details to the hotel for processing

OR

PRE-AUTHORISED PAYMENT:Select a multiple-use cardLoad booking amount along with additional small amount, and enter a deletion date


1. SCHEDULE LOADING OF FUNDS:• Schedule the initial deposit and remainder of the balance• Modify settings if booking needs to be extended/cancelled

2. AUTOMATED LOADING OF FUNDS:• Outstanding balance is loaded automatically• Hotel processes the remainder of the balance

Post and part paid bookings (refundable)


3. CARD SETTLEMENT:• Card is settled and deleted• Remaining funds are returned to the funding account


Benefits of virtual card payments for hotel bookings


FEATURES ADVANTAGES BENEFITS

Multiple-use card

Automated schedule load

Automated card deletion

Modify booking payment

Cash flow planning reports

Single-API

Can be used for pre-authorisation; partial payment and extended stay

Schedule the loading of funds when required; no need to manually track the loading date.

No need to manually delete the card after check-out; remaining funds retrieved automatically

Modify loads & payment dates, if customer changes bookings

Increased visibility for future card loads; system notifications to fund account in time

Manage all booking types through one API

Fool-proof payment; all transactions for a single booking remain tied to one card

Improved cash flow; avoid building business logic into your systems; no manual tracking of payments, or missed payments

Increased efficiency with no manual work involved

Increased flexibility ensuring minimum disruption to operations

Improved management of your cash flow and funds

Eliminate the need to jump between multiple virtual card systems or bank transfers


Send your questions and comments to [email protected]

Replay and presentation of the webinar will be available shortly on www.travolution.co.uk


ixaris hotel payment solution

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