As young travelers build wealth and invest in travel and experiences more than their older counterparts, alternative and custom payments optionality are set to become table stakes for travel providers. Led by GenZ and Millennials, travelers are increasingly using alternative payment methods and demanding payment customization in lieu of traditional methods. 

Rise of Alternative Payment Methods 

20% of GenZers and 24% of Millennials used an alternative payment method when they booked their most recent travel; choosing options like Apple Pay, PayPal and Buy Now Pay Later. These two generations use alternative payment methods 2x more than older generations, signaling a generational shift to modern payment solutions.

For the youngest generation of travelers, debit cards still play a significant role in travel purchasing, with about half of purchases made using a debit card. This is no surprise as historically younger people like GenZ, with adults as young as 18 years old, need time to build enough credit to qualify for credit cards. 

Source: Survey of US based travelers who booked flights, hotels or both, commissioned by Hopper.  N > 1,200.

What’s unique about the Gen Z generation is that one in five travel transactions already occur through an alternative payment method. As debit card users build savings they are signaling a clear preference for eschewing traditional credit cards and choosing alternative payment options. This trend is clear among Millennials, many just a few years older than GenZers, who are already using alternative payment methods on one out of every four travel transactions.

The shift to using alternate payment methods is happening across the travel industry, with cruises and vacation rental homes seeing the highest incidence of alternative payment method usage. 

Source: Survey of US based travelers who booked leisure travel, commissioned by Hopper.  N > 1,200. 

Customization & Combination

As loyalty programs for many major travel providers and credit card issuers have grown in recent years, so has demand for the ability to use rewards points/miles to purchase travel. More travelers use points, or a combination of points and another payment method, to purchase travel than those who use Apple Pay, Google Pay or Buy Now Pay Later options alone.

Source: Survey of US based travelers who booked leisure travel, commissioned by Hopper.  N > 1,200.

Rewards programs continue to increase in popularity with travel providers and credit issuers investing in their rewards offerings. Demand for the flexibility to pay with points, or combine payment methods with points, is set to surge in coming years as points grow into the next major travel currency. 

Payment Optionality Drives Conversion

Hopper’s mobile first development strategy is guided by our goal of building the best travel searching and booking experience possible. With rapid and iterative experimentation, Hopper has built a highly efficient and seamless checkout experience with a full range of payment optionality and customization for customers. Not only does this checkout experience improve the customer experience, it also is a key tool in driving customer conversion and loyalty in the Hopper app, on the Hopper website and across the many bank portals we power worldwide. 

It has been abundantly clear throughout our checkout experimentation that delivering a seamless checkout experience doesn’t just make the booking process easier for customers, it makes customers book more. For example, adding expanded payment options on the Hopper app resulted in substantial conversion increases with each incremental payment option launched. 

Implementing the entire HTS Checkout funnel, including the digital wallet and our UX best practices, can drive as much as a 35% increase in conversion for new partners. 

Travel Conversion Increases from Addition of Payment Methods

Source: Actual observed conversion increases on Hopper App when new payment methods were introduced. 

Introducing: HTS Checkout

Leverage Hopper’s expertise in payment optionality and customization on your channels to drive conversion, loyalty and repeat purchases. With HTS Checkout from the B2B division of Hopper, your brand can capture more direct revenue and supercharge loyalty with a next-generation hosted checkout solution that combines multiple payment options, sophisticated anti-fraud technology, and wallet capabilities. 

Maximize conversion and loyalty with a best in class checkout experience

Our payment ecosystem connects to over 100 payment options and multiple integrations to make sure you can optimize payments in every local market and globally.

• Support multiple payment options, including wallet credits, loyalty points, card spend, and alternative payment methods.
• Offer many global and local providers with 28+ card schemes.
• Customers can split pay between payment methods and apply partial points/credits.
• Accelerate performance with loyalty integration and our modern wallet infra.
• Save money & serve more markets effectively with 200+ acquirers, aggregators, and PSP providers.
• Intelligent routing ensures maximum acceptance across +35 currencies.
• Reduce fraud through utilizing AI and ML, with vast industry data and specialization.

Go above and beyond for your customers

HTS Checkout is a highly customizable, fully branded, and native checkout page, accompanied by a sophisticated payments solution. We offer global coverage with multiple payment providers and payment types to help you optimize payments in every local market — proactively preventing fraud with AI-enabled tech.

• Award-winning mobile and web UX that is designed to look and feel like your native experience with your brand front and center.
• Localized for each market — from copy to currency and local payment processing.
• Secure and scalable cloud platform — SOC 2 compliance, plus anti-fraud detection backed by an experienced and large fraud team.
• Reliable and redundant systems — multiple redundancy support to protect against business risk from unexpected outages or non-responsive endpoints.

Want to learn more about how HTS Checkout can supercharge your business? Reach out today, we’re eager to start the conversation.  

Methodology: This report combines primary research by Hopper & HTS into industry and customer trends with proprietary data from Hopper & HTS’s own testing. Survey data is from a survey commissioned by Hopper & HTS of US based travelers who booked leisure travel in the previous 6-12 months (n > 1,000).