Penetration of e-ticketing to result in gradual reduction in cash-based transactions in China

China Special: By EFT Correspondent

Major carriers in China are progressively targeting international travel marketplace and launching international English e-ticketing on their websites.

For example, China Southern Airlines’ new global website offers seven different language profiles, including simplified Chinese, complex Chinese, English, Japanese, Korean, French and Dutch, and supports online payment in five currencies, namely, US dollars, Hong Kong dollars, English pounds, Euros and Singapore dollars.

www.flychinasouthern.com is available for on-line ticketing for five regional and international services from Guangzhou to Jakarta, Singapore, Los Angeles, Hong Kong and Kuala Lumpur, as well as all China Southern domestic flights.

The industry has even done a creditable job related to e-ticketing in the domestic market.

Commenting on the latest developments from the payment solutions perspective, Martijn Hovinga, Chief Executive Officer, BilltoBill acknowledges that e-Ticketing is a catalyst for online payment and will help to reduce the percentage of cash-based transactions.

Last year, Hovinga had shared that as business grows, cash slowly but steadily will loose ground.

Is it loosing ground? On this, he said, “It is too early to tell yet. And adequate statistics in PRC about this are lacking. It is also a self-fulfilling prophecy: when more quality brands start to offer their products and services online more will be purchased and paid online.”

Hovinga spoke about latest developments related to his company and overall progress made by payment mechanisms in an interview with EyeforTravel.com’s Ritesh Gupta. Excerpts:

What have been major developments for BilltoBill Limited in the Chinese travel industry in the last year or so?

We have welcomed a number of new merchants using our service. Amongst them, the highlight is 
starting processing transactions for Cathay’s and Dragonair’s online bookings from China (PRC).

Then, there is development of a new revolutionary business-to-business payment service, the ‘BizztoBizz Accelerator’. Other highlights are as follows: Being awarded as the ‘Best Payment Gateway for Travel and Airlines’ in PRC; Developed call center payment solution for travel industry based on Chinese Credit Card payment; A substantial strategic investment by FCP Brencorp (a joint venture between First Capital Partners Hong Kong and Brencorp from Australia).


Last year you told me for online authorisation, debit cards (over 800 million on issue) are very important, much more so than credit cards and the debit cards are the most important payment method for outbound. How significant are debit cards as a payment method in the Chinese travel industry?

Now there are around one billion debit cards on issue. Depending on the transaction size debit cards are very important.

Since Chinese banks apply limits on the online transaction amount with debit cards, unless extra secured by a ‘USB key’, they are more appropriate for smaller size transactions. For the travel industry, credit cards are the dominant payment method. One of the reasons, Cathay selected BilltoBill alongside their existing payment service provider for international, because we could offer both credit cards in the local currency, RMB, and debit cards.

From business perspective, your company became the first online payment company to become an online payment partner to a Chinese airline for its international business. How are the needs of carriers in China evolving in your opinion?

Currently Chinese credit card acquiring banks can process in RMB only which may result in an unpleasant surprise for holders of cards issued in other countries.

Hence, Chinese mainland carriers wishing to sell online to customers outside of PRC, must acquire the capability to accept payments in international currencies such as USD, JPY, EUR, HKD, SGD and AUD through working with payment gateway companies who have access to banks outside of PRC.

What regulatory changes would you like to recommend for the growth of travel industry from BilltoBill’s perspective?

It would be easier remittance of funds outside of PRC and allowing other GDS’s to compete with Travelsky.

What trends do you project in Chinese payment methods in the years to come?

·          Strong increase of issuing credit cards, especially Visa (as sponsor of the 2008 Beijing Olympics).
·          Chinese banks will push the distribution of additional security devices (USB-key, containing PKI based digital certificate) for internet banking and online payment using debit cards.
·          Consolidation of the number of payment gateway companies.
·          Strong increase of online payments caused by e-ticketing, access to low fares to international destinations from China offered by (foreign) budget airlines.
·          Companies who sell trough many distributors (such as travel agencies) have a strong requirement for business-to-business (b2b) solutions, automating the manual work and speeding up the matching of received payments.