On-board payments are moving away from cash and favouring cards as new technologies evolve. But despite their popularity among US carriers, there are still some questions to be addressed. Keith Mwanalushi from Low Cost & Regional Airline Business discusses some of the concerns that remain.
In many ways, payment systems are a victim of their own initial success. Rightly regarded as essential for innovation, they have enabled airlines to develop products and services that provide alternative choices to their customers with regards to non-cash payments. Many low-cost and full-service carriers have now introduced the buy-on-board (BoB) option to passengers; effectively becoming in-flight retailers.
However, in spite of the rise in the number of cashless cabins – particularly in the US – the technology to cater for this phenomenon has been relatively slow to develop due to the challenges associated with processing in-flight transactions. Other questions have been raised regarding any bugs and glitches: who is responsible when the device malfunctions?
Consumer reports show mixed reactions to a cashless cabin. Postings on a popular travel website show queries from passengers that prefer to pay cash, who questioned whether using a card for a $3 charge was worth it. "Don't the airlines have to pay the credit card company a fee on each charge? That means the price of drinks will go up," one posting read. Officials at various airlines acknowledge credit fees but say that hasn't changed the price of meals, snacks, alcoholic beverages, headphones, movies, pillows or blankets. One concern to consider is that consumers who use cash could face tough treatment, as in some instances cash causes added fees to kick in.
A recent report in the North Jersey News brings an interesting case to light. A passenger on a flight from New York to Hawaii purchased a headset using a credit card and was told that the headset would work on all future flights with that airline. So when he boarded his return flight, he packed away his credit cards into his hold baggage and took the headset with him.
As soon as he took his seat, he was advised by an attendant that the headset "wasn't compatible with that airplane". The passenger then tried to pay $3 in cash to get a new headset, but the flight attendant quickly said no cash payments were allowed, leaving the passenger with no access to in-flight entertainment on the long flight. According to the news portal, a New Jersey lawyer later filed a lawsuit saying the airlines are engaging in "unlawful discrimination against individuals who do not physically possess a debit or credit card," the lawsuit claims.
How far will the cashless revolution spread? Only time will tell.
To read more about the positives, negatives and development of payments technology for airlines, click here to download the full article. This blog post was first published as a full-length article in the July 2013 issue of Low Cost & Regional Airline Business.
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