Payments


It’s been an amazing six years working for Amadeus – I’ve learned a lot and had a great time in the process, but after occupying a variety of mainly airline e-commerce related roles in both Madrid and Chicago, the time has come to return to Australia and embark upon a new challenge. I have accepted a role with MasterCard based in Sydney; so new location, new employer and a new industry. I did work for Commonwealth Bank of Australia in the past and also have some payments experience from Amadeus, so the industry is maybe not completely new to me, but I’m excited by the prospect of still having so much to learn.

I first met the people from MasterCard about three years ago when Qantas chose the MasterCard Internet Gateway Service (MiGS) as part of their plans to improve direct channel payments. Now there are about twenty airlines (mainly in the Middle East and Asia Pacific region) using MiGS. At the time, I was on the Amadeus end negotiating terms for airlines using MiGS to link directly to the Amadeus Payment Server so it will be interesting to work on the other side going forward. Amongst other things, I’ll also be involved in the rapidly evolving mobile payments space, an area that I am convinced is set to really take off. MasterCard are investing heavily in this area and appear well positioned to play a major role.

Writing this blog has been an immensely satisfying experience since I started back in January 2009. Now over 2 years and 375 posts later, The Shearwater Blog is taking an extended break, possibly even permanent. I’ll keep the site up and hosted on WordPress at least until the end of the year – the reason being that search engine traffic to these pages indicates people are still interested in reading the older material, but even that traffic should drop off without new content being added. Maybe prior to the end of this year I’ll have a change of heart, but the commitment required to produce 3-5 posts every week should not be underestimated. Maybe this is why I occasionally have people telling me they want to start blogging, only to give up after a few unread posts – for the first 3 months here it sometimes seemed like the only people reading my stuff were friends and family, and not even many of them!

Earlier this year I was quite happy to reach a milestone and see that over 100 people had subscribed to this blog. For such narrowly focused subject matter this made me quite proud. I am genuinely grateful that over 100 people found my material interesting and relevant enough that they would subscribe, plus that many again visiting the site most weekdays in recent months.

Even though I will cease blogging here, I still intend to contribute occasional articles to Tnooz. Despite the growth in traffic and subscribers that The Shearwater Blog has achieved, it is dwarfed by the number of people who read anything I write for Tnooz. My job with MasterCard will be much bigger than just the travel sector (with a smaller geographic reach – A&NZ will seem small compared to my Amadeus job covering North, South and Central America), but I do enjoy writing so it will be difficult to give up completely. Given that about 25 times as many people read my stuff on Tnooz compared to the average number reading a post here, I’m sure I’ll find some way to maintain a reduced social media profile. Don’t be surprised if those pieces have a bit more of a payments focus in future.

With MasterCard I’ll be working in an office just off the right side of the picture below, so if you find yourself in Sydney for any reason and were a subscriber to this blog, I think that at least should see me paying for the first drink.

Since I started telling friends and colleagues that I was moving to Sydney I must have had close to ten people ask me to keep an eye out for them as they would also love to live and work in Australia. For everyone else (ie. those not yet sold on the benefits of Australia), I’ve added another shot just to help you understand that even for a Melbourne boy like me, Sydney really isn’t such a bad place to live and work. The MasterCard office in North Sydney is to the left of the bridge in the photo below.

To all the airline executives, industry suppliers, even competitors – in fact to anyone that was a regular reader of this blog over the past few years, I really appreciated your support; even if that support was simply showing up in my site statistics letting me know that I wasn’t writing into a vacuum. The opportunities this blog has created for me in terms of invitations to speak at conferences, meeting a wide range of new people, and probably most importantly, in clearly positioning me away from being perceived as a foot-in-the-door product salesman, have been profound. On that last point, being seen more as a consultative seller frequently being asked by airline executives to discuss not only the products I represent but the wider industry trends, sometimes other players in the industry, and then how airline direct channel sales departments need to respond to the rapidly changing online (and now mobile) environment – this has been the most satisfying outcome of the many late nights or early mornings I sat at home writing a blog post and wondering if anyone would want to read it.

I can still be contacted via this form (forwards to my personal email address), so even though I am leaving full time involvement with the travel industry, I have no intention of leaving behind the many personal and professional relationships I have build up over the last six years working with so many great people in such a dynamic space. Even though I’ll be focused on the payments industry going forward, I’m sure I’ll still find time to keep an occasional eye on innovation in the online travel sector – working for Amadeus and then writing this blog has been too much fun to forget it completely.

Extremely short post today, but when it comes to airline ancillary revenue, Air Asia are almost certainly the Asian nomination to join Ryanair and Allegiant as the masters in this category. So when Air Asia founder and CEO Tony Fernandes talks on the topic, people tend to listen. His quote below is something I’ve never actually heard an airline boss single out in quite this way. Normally you get passengers complaining about having to pay for any unbundled service without being specific, whilst airline bosses talk about how great checked bag fees are; which  makes the quote below even more revealing.

“I’m on Facebook and Twitter and the only one (ancillary charge) that people seem to dislike is the convenience fee for using credit cards.

You can read the full article here.

Even when I allow myself to get off track with this blog (as I’m about to do today) I still make sure I put in at least some relevant information. So let’s start on message, and see where I end up… Ryanair are looking to hire a Ancillary Revenue Executive based at Stansted airport that reports to the Director of Commercial Revenue. Good luck if you throw your hat in the ring for that one. More problems at Air New Zealand and their IBM data center, although nowhere near as bad as the last outage. The other week it was Garuda and Spirit, this week Air NZ.
But the real purpose of this post is to talk about dynamic currency conversion (DCC) and customer satisfaction. Despite being a huge fan of DCC and its role in revenue generation for an airline website, as a consumer sometimes I am less enamored – such as on one business trip to China. (Speaking of China, this story on my old friend Matthew Ng and his travel business in Guangzhou is a must read. I remember taking him into some decent surf at Bronte Beach in Sydney in the late 90’s only to almost drown the poor guy – that day must look like a party now compared to his current misfortune at the hands of the Chinese Communist Party).
I was looking at a Bank of America credit card application recently and saw some very DCC unfriendly text which went “Transactions made in a foreign currency and transactions made in U.S. Dollars that are processed outside of the United States” would be subject to a 3% fee. So if on that card I use DCC, then I am whacked by both the merchant and my home bank – you can see why as a consumer sometimes you need to be careful.
Here is where I get to Avis. They have a service for frequent renters called Avis Preferred, and my initial impressions were extremely favorable as you turn up and without signing any forms and the keys are in the ignition so you just walk up and drive off in your car. But the sting is in the tail, as if you have a foreign issued credit card on file they default to DCC; they even have the nerve to print on your receipt that you were given a choice in the matter. Trying to exercise that choice is another matter indeed.
The person using the the mobile card reader upon return couldn’t change it, and going into the Avis office turned out to be a painful experience where no-one could find the key to some drawer that was required to process my non DCC charge. Even when they kept me waiting for close to 10 minutes and finally found the key, they still stuffed it up and charged me using DCC a second time. By this stage I was over it, so just paid and walked off.
But the story gets better. I ring up AVIS afterwards (you can’t manage your preferences online!) and the woman changes one setting, but then I ask to turn off DCC and she tells me I’ll have to be transferred to a different area. That phone must have rung for over a minute before I hung up in frustration.
What is the moral of this story for airlines? Here it is. As much as I hate to say it, I will not be leaving AVIS. And I am not some once a year renter, but one of their better customers. To go into the reasons for why this would require an entirely new post, but the point is that people so often complain about airlines and how because of some negative experience they are adamant that they will never travel that airline again. In fact, just today I saw Kevin Smith making this claim about Virgin America.
The actor-director at first declared he would never fly Virgin Airlines again
Giving your important customers what they value is crucially important, but the message here is that sometimes it can be very hard to separate the decion making criteria from the noise. Maybe measuring customer satisfaction is not all it is cracked up to be?

It has been quite a while since I wrote anything on airline industry forms of payment and the associated topic of payment card industry compliance, but I saw a blog post from Tom Kemp at Centrify talking about the work his firm had done with my employer Amadeus, and even taking my Amadeus hat off for a while, it is an interesting read. So if your work ever sees you trying to get your head around PCI compliance issues (and I’ve seen some horrors stories within certain unnamed airlines in the past), or if you’ve ever heard people talk about tokenization or 3D Secure and wondered what language they were speaking, then getting more familiar with issues around payments is never a bad thing.

I’m hoping to bring some interesting news from Horizons in San Francisco later this weeek, but in the meantime, I hope you enjoy reading about PCI compliance.