From Nigeria to South Africa and all the countries around and in-between, transportation stakeholders in Africa are increasingly leaning on emerging technologies in commuting applications, customer data information management, and payments to find innovative solutions that will deliver a seamless service delivery for their customers.
This continent’s wide quest to leverage technology has become imperative, especially during the COVID-19 pandemic. Key players in aviation, port, rail and road sub-sectors are seeking to alleviate the many pain points that afflict the industry, while enabling seamless and efficient systems alongside a passenger experience that will usher in development and sustainable prosperity for operators.
However, there is a worrying sluggishness to the adoption of digital payment solutions across the continent. This is not unrelated to a number of irksome issues around the payment experience such as stressful processes and a question of trust, which have combined to complicate matters for travel passengers. For example, while most frequent air travelers know that purchasing tickets online is not only more affordable than buying over the counter, it is also far more convenient, but many passengers still put up with the stress of physical purchases.
On the other side of this dichotomy is the difficulty occasioned by that same fragmented nature of ancillary services associated with the industry and the corresponding challenges travel companies themselves endure in managing the multiple Payment Service Providers (PSPs) who power the many platforms for those various offerings connected to the aviation industry, and entire transportation ecosystem.
A case in point was an unpleasant incident in 2010 when an Aero Contractors flight from Lagos to Abuja was delayed because the aircraft had more passengers than it could carry legitimately. This scenario was a direct result of the airline’s inability to accurately account for the number of passengers that had booked online across various platforms due also to an absence of an integrated operations and payment platform. Though that era has passed, the incident left scars on many people who would rather now pay cash.
Still in Nigeria, the administration of former Governor Abiola Ajimobi of Oyo State, established a public transport system called Ajumose similar to the Bus Rapid Transport (BRT) in Lagos, which leverages digital payment for seamless operations. Unlike the Lagos’ approach, which has, to some extent, succeeded, that of Oyo State is flailing and almost moribund because of fraud and ticket racketeering.
The Oyo model could have fared better if there was a unified payment system for cashless payments that would have eliminated the issues.
Putting the issues into proper perspective is a 2018 Study Report by PYMNTs.com and Amadeus, on Payments Travel, which revealed that the struggle for travel companies is real when it comes to managing PSPs.
The study showed that most travel companies use between three to 10 outside PSPs, with only 8% relying on just two. Four out of 10 travel operators admitted to having trouble managing multiple PSPs, with nearly half (49%) of them citing the complexity of their existing payments system as a hindrance. In addition, travel companies spend a weighted average total cost of about 5.4% of their revenues, representing approximately $75 billion on their payments systems.
Those issues mainly result from a lack of interoperability among mobile money operators, low credit card uptakes, and preference towards local debit cards making payments processing in Africa difficult. This struggle is further compounded by the absence of a common African currency which, for airlines or hotels with a presence in multiple countries, increases the turnaround payment processing and settlement period.
These problems extend to other means of transportation across the continent, but which incidentally are effectively being resolved with universal digital payment solutions that create seamless payment experience for passengers on one hand, and smoother business operations for operators, on the other hand.
“Digitizing the public transport sector is inevitable (to evolve and transform the industry) in a way that both the governments and transport companies, as well as everyday commuting public can gain from its implementation as it affects not just aviation, but ground transportation, Logistics, etc,” Patrick Buchana Nsenga, Founder & CEO, AC Group noted during an industry Webinar event hosted by Cellulant.
Incidentally, Payment Service Providers like Cellulant are investing in building the infrastructure that will address the struggles for the travel sector to reduce the number of PSPs that travel companies deploy to just one or two, while also improving the customers’ experience through an integrated simplified payment system.
Most recently, Cellulant has expanded it’s digital payments platform to better serve sectors such as the airlines industry. They have partnered with airlines such as Kenya Airways to provide a variety of mobile and bank payment options to its customers paying for bookings online. The success of this first-of-its-kind payment solution in Kenya further sparked the transformation drive that has seen Cellulant forge ahead to power local and international payment methods for local, regional and global airlines across Africa.,
Particularly driving Cellulant’s committed intervention in the travel industry is the customer insight that the increasingly mobile and internet penetration on the continent is resulting in the modern African consumer developing heightened appetites for on-the-go payment methods that put all transactional solutions at-their-fingertips.
In Nigeria, more travel companies are beginning to see payments innovation as a long-term investment. Payments Services Providers such as Cellulant with a local and pan-African reach will be great partners to airline operators and inter-state transport companies looking to expand their businesses and offer seamless payments solutions to their customers.