Why online-travel giant Booking is getting into the fintech game

Add Booking Holdings Inc. to the list of e-commerce companies betting that tighter control over the checkout process will create a better experience for consumers — and a new revenue stream.

Earlier this month, the online travel company announced that it was launching a fintech unit that aims to simplify some of the monetary hurdles of international travel, from booking a room at a hotel in another local currency to fulfill a purchase commitment for a trip that will not take place for several months.

Fintech represents the “last great mountain” for Booking

Daniel Marovitz, senior vice president who will lead the new team at the company, which houses brands like, Kayak and Priceline.

After initially operating on an “agent” model, in which hotels would receive payments for rooms booked by customers, Booking has spent the past few years trying to get into the payment stream itself. Last year, 22% of bookings were through the company’s own payment platform, compared with less than 4% in 2017, and Marovitz is expected to continue to grow in the future.

Chief Financial Officer David Goulden said at an investor conference in March that Booking’s payments platform is “no longer a drag on profitability” and has helped the company in its efforts to connect more elements of travel. specifically so that consumers can pay a supplier for different parts of travel.

Booking provided a way for their supply partners, such as hotels, to expand the payment options they offer to consumers. For example, a Kansas hotel might not want to do the work of setting up Alipay acceptance on its own to better serve Chinese travelers, but Reservations has done the work behind the scenes to allow Its provider offers local wallet payments such options that its partners don’t need to manage them all individually. US-based vendors still receive their payments in US dollars in the end.

The company sees a revenue opportunity in enhancing the payment experience through a wide selection of vendors. “We wanted to make the price extremely competitive because we were doing it at scale,” said Marovitz.

“The goal over time for Booking is to provide a diverse menu of services in the fintech space,” he told MarketWatch. The company will explicitly charge some of these services, and providers will have the flexibility to choose the “set” of services that best meet their needs.

The fintech team’s future areas of exploration include buy-now options and forex benefits. Booking is running a “small scale” test with buy-now-post-pay functions that allow everyone to split payments evenly across installments.

Buy now, pay later wave: Klarna, Affirm and opponents hope to beat the US by storm

Marovitz said that while the company has built a lot of its own fintech infrastructure in a joint effort to get more involved in the payments process, the company is also open to possible partnerships. help the company perform functions more efficiently.

On the foreign exchange front, Marovitz is intrigued by the ways that Bookings can serve travelers from emerging markets with volatile local currencies. When people travel, they can commit to paying for trips that won’t happen for several months, and they often buy trips in the hotel’s currency. “Four months from today, the trip could be 25% more expensive,” explains Marovitz.

Fintech is a hot area for e-commerce companies, and Booking is not the only online shopping player looking for deeper involvement in the world of payments. EBay Inc.
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Was several years into its managed payments initiative, also seeks to offer more domestic wallet options, which the company says will create a better shopping experience for international buyers. Shopify Inc.
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helping businesses build online stores, have also bet big on payouts and recently launched an installment program in partnership with Affirm Holdings Inc.
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Booking argues that its intersection with payments is one of the most complex in the world of online sales because of the global nature of travel. “Even the big global e-commerce brands tend to be quite local,” says Marovitz, giving the example of Inc.
operates a US website that sells goods in US dollars primarily from US merchants or merchants abroad who present themselves as US merchants. Bookings offers products in 210 countries and territories, and “every possible currency pair you can imagine is in our business,” he continued.

The company has set a goal to have more than 400 employees in its fintech unit by the end of the year. Although Marovitz did not give a specific figure on the total number of employees currently working on such efforts, he said the team is “growing into” a goal of more than 400 people with a focus on technology and needs. strong demand for designers, copywriters, and engineers.


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