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Americas

United States
Puerto Rico

Europe

Denmark
Germany
Ireland
Norway
Poland
Sweden
United Kingdom
Spain

Americas

United States
Puerto Rico

Europe

Denmark
Germany
Ireland
Norway
Poland
Sweden
United Kingdom
Spain

In the dynamic landscape of the airline industry, optimising 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.

Key takeaways:

Improving card acceptance

will reduce declines and enable your business to maximize revenue.

Reducing operational cost,

especially from compliance-related fees, can enhance your profitability and improve margins.

Ensuring optimum setup

for payment processing converts into optimal classifications and lower processing costs.

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 Card Not Present (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:

  1. Incentivise your card holders to use credit cards as they are statistically far less likely to get declines compared to debit cards
  2. 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 e-commerce transactions to be secured whether it is through 3DS, tokenisation or exemptions. This is how to ensure you meet the requirements:

  1. Authenticate payments via 3D Secure (3DS) or enable tokenisation when required. As a merchant, alongside your PSP, you dictate how these requests are sent; OR
  2.  Utilise 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 
  3. Utilise a Cardholder Authenication Verification Value (CAVV) to identify unsuccessful authentications and qualify for special interchange pricing 
  4. 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 card brands 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

Behavioural scheme fees are mandated to improve the payment ecosystem and transaction quality by tackling inefficient behaviours, such as excessive authorisations.

You can achieve compliance with these programs by:

  1. Ensuring the correct flow between authorisation and clearing messages (potential reduction of $0.01-$0.05 per transaction)
  2. Introducing Payment Tokens or performing 3DS (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.

Related resources

Achieving best-in-class approval rates for your bookings

Achieving best-in-class approval rates for your bookings

Our guide to navigating PSD2 SCA regulations provides travel and hospitality merchants with a guide to mastering transaction optimisation.

PSD2 Strong Customer Authentication for travel and hospitality

PSD2 Strong Customer Authentication for travel and hospitality

Embrace the changes that will protect you, your customers and your sales. Download our guide on Strong Customer Authentication for the travel and hospitality sector.

For airlines, cashflow is critical: mastering airline data

For airlines, cashflow is critical: mastering airline data

William Pershke, vice president of global airline consulting for Elavon, outlines four best practices to make sure you’re being paid what you’re due, when you’re due it.