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