Payment optimization for airlines 

In the dynamic landscape of the airline industry, optimizing revenue streams and enhancing payment performance are essential to success. Airlines can unlock hidden revenue and bolster their financial health by implementing a series of best practices.

2% increase in approval rate can generate, on average, $1M monthly revenue without a retry

The United States and Europe have a significant variance in approval rates mainly since European regulation is more complex with a big focus on transaction security (for example PSD2). In addition, European transactions for airlines are predominantly cross-border adding to the complexity of the ecosystem.

Insufficient funds is the top contributor towards CNP declines for airlines making up 45% of all declines. These types of declines are driven by cardholders and can be difficult to resolve.

To combat this:

• Incentivize your card holders to use credit cards as they are statistically far less likely to get declines compared to debit cards
• Offer as many varied forms of payment as possible to your cardholders, including Buy Now Pay Later or similar cost splitting schemes

Successful approvals start with strong transaction security

European regulation requires ecommerce transactions to be secured whether it is through 3DS, tokenization or exemptions. This is how to ensure you meet the requirements:

• Authenticate payments via 3DS or enable tokenization when required. As a merchant, alongside your PSP, you dictate how these requests are sent; OR
• Utilize Strong Customer Authentication (SCA) exemption flags in Europay Mastercard Visa (EMV) 3DS authentication message for highest chance of approval. As a merchant, alongside your PSP, you dictate the flow of SCA transactions
• Utilize a Cardholder Authentication Verification Value (CAVV) to identify unsuccessful authentications and qualify for special interchange pricing
• Authenticated transactions can still be declined due to technical reasons or abandonment. Work with us and your PSP to understand how to remediate error values

Exemption and CAVV Values

SCA Exemption Values:

• 01 = Merchant Initiated Transaction
• 02 = Transaction Risk Analysis
• 03 = Recurring
• 04 = Low Value Payment
• 05 = SCA Delegation
• 06 = Secure Corporate Payment

CAVV is a cardholder account verification value and is used by scheme to judge whether an authentication was a success:

• Mastercard (0: Authentication failed,1: Authentication attempted, 2: Authentication successful)
• Visa (Blank/0: CAVV could not be verified or missing, 1,4,7,9: CAVV verification failed, 2,3,8,9,A = CAVV verification successful)

Increase compliance and reduce penalty fees

Behavioral scheme fees are mandated to improve the payment ecosystem and transaction quality by tackling inefficient behaviors, such as excessive authorizations.

You can achieve compliance with these programs by:

• Ensuring the correct flow between authorization and clearing messages (potential reduction of $0.01-$0.05 per transaction)
• Introducing Payment Tokens or performing 3DS Secure (potential reduction of 0.025% per transaction)

Benefit from lower processing costs by ensuring optimum transaction routing

Domestic transactions on average cost less than cross border, so by making sure you have legal presence in the right countries is key to benefit from the cheapest processing costs.

Match MID country to card issued country. For example, if MID is in GBR but 65% of cards issued in FRA consider routing the transaction via a MID in FRA to increase domestic presence

The recommendations above are very simple examples of optimum transaction routing. They are subject to scheme merchant location rules and the legal presence in a country you wish to route the transaction through.