Pay-by-bank provider Trustly has launched a partnership with travel technology company Sabre Direct Pay.
The collaboration, announced Tuesday (May 13), is designed to bolster payment solutions for U.K. and European travel agencies, letting Sabre offer direct bank payments to travel providers. Sabre will also recommend Trustly’s technology to its customers.
“Sabre partnering with Trustly reflects a growing trend within the travel sector to embrace new payment innovations,” the companies said in a news release.
“Trustly recently announced that UK holidaymakers were increasingly opting for an alternative to cards in January, and spent 230% more year-on-year on holidays, using the secure account-to-account payment technology.”
PYMNTS Intelligence has worked with Trustly on research showing that while pay by bank represents a largely untapped opportunity, the proper incentives could lead to widespread consumer adoption.
That report, titled “What Consumers Need for Pay by Bank to Catch On,” shows that strategic incentives, particularly discounts and cash-back offers, substantially boost interest even among consumers who were initially resistant.
While current usage remains modest, the research found that future growth depends on effectively connecting with key demographics and spotlighting the applicability of pay by bank beyond traditional retail transactions.
The report also points to a major awareness gap as a chief hurdle, with 56% of consumers saying they are simply not familiar with pay by bank.
“However, the research highlights the power of incentives in bridging this gap, demonstrating a 72% increase in interest when consumers are offered cash-back discounts or loyalty benefits,” PYMNTS wrote recently.
Speaking with PYMNTS CEO Karen Webster earlier this year, Trustly founder and CEO Alexandre Gonthier said that boosting can hinge on getting consumers to switch from debit and credit cards. However, have some work cut out for them to educate and incentivize customers to choose pay by bank.
“It’s not an easy task to crack retail with pay by bank because of Visa and Mastercard’s presence,” Gonthier said.
The challenge is illustrated by additional PYMNTS/Trustly research, showing that while 46% of consumers are interested in making open banking payments, just 11% have done so.
However, part of the appeal of pay by bank from the merchants’ point of view is that they can save roughly 1.5% that they pay on the cost of payment processing, he added.
“Open banking gives us granular visibility into a consumer’s risk profile, and that gives us the ability to compress the pricing that merchants are charged,” said Gonthier.
