What is ancillary revenue: Ancillary revenue refers to the income generated from non-ticket sources, such as baggage fees, seat selection, and in-flight purchases.

The airline industry is facing a paradigm shift as it adapts to evolving consumer preferences and payment behaviors. According to a 2025 report from Statista, ancillary revenue for airlines is projected to reach $82 billion by 2026, highlighting the importance of optimizing every revenue stream. One of the most effective strategies is to support local digital payment methods, which can enhance customer satisfaction and drive additional sales.

Supporting local payment methods allows airlines to cater to diverse customer preferences, particularly in regions where traditional credit card usage is low. This strategy not only improves conversion rates but also minimizes checkout abandonment, which is crucial as 70% of travelers abandon their carts due to payment issues, according to a 2025 study by Forrester.

Context

Airlines can capture more ancillary revenue through local digital payment methods by enhancing customer convenience and reducing friction in the purchasing process. In 2025, 63% of consumers preferred using local payment methods over traditional credit cards.

For many travelers, especially in emerging markets, local payment methods offer a sense of security and familiarity. This is particularly important in regions where credit card penetration is low. By embracing these payment options, airlines can tap into a broader customer base.

• Increased market reach: Airlines can engage customers who prefer local payment methods, expanding their market share.
• Improved customer experience: Offering familiar payment options enhances the overall purchasing experience.
• Higher conversion rates: Local payment methods can lead to a 20% increase in completed transactions, as reported by McKinsey.
• Reduced cart abandonment: Supporting local payments can decrease cart abandonment rates by up to 30%.

Core Challenge

The core challenge airlines face is integrating a wide variety of local payment methods while ensuring a seamless user experience. Without a robust payment infrastructure, airlines risk losing revenue opportunities.

Many airlines still rely heavily on traditional payment processing systems that do not accommodate local preferences. This can lead to frustration among travelers who may abandon their purchases if their preferred payment method is unavailable.

In 2025, airlines that do not support local payment options could see a revenue loss of up to $15 billion, as per a report by the International Air Transport Association (IATA).

How to Capture Ancillary Revenue with Local Payments

To effectively capture ancillary revenue through local payment methods, airlines need a strategic approach that includes identifying popular local payment options and integrating them into their systems. This strategy can significantly enhance the overall customer experience.

Airlines should conduct market research to understand the payment preferences of their target demographics. This information will guide the selection of payment methods that align with customer expectations.

• Research local payment preferences: Understand which payment methods are most popular in key markets.
• Integrate payment systems: Utilize a payment gateway that supports multiple local payment methods.
• Test and optimize: Continuously monitor transaction success rates and customer feedback to refine the payment process.
• Educate customers: Provide clear information about available payment methods during the booking process.

Deep Dive

To dive deeper into the benefits of local payment methods, airlines must consider the specific needs and behaviors of their customer base. Understanding these nuances can lead to tailored solutions that enhance ancillary revenue.

For instance, in markets like Southeast Asia, e-wallets such as GrabPay and GCash are preferred. By integrating these options, airlines can cater to local preferences, thereby improving customer satisfaction and loyalty.

• Localized marketing: Promote local payment options through targeted marketing campaigns.
• Partnerships with local providers: Collaborate with local payment providers to enhance credibility and trust.
• Data analysis: Use transaction data to identify trends and adjust offerings accordingly.
• Customer feedback: Actively seek feedback to improve the payment experience.

ROI and Business Case

The return on investment (ROI) for implementing local payment methods can be substantial, with airlines potentially increasing ancillary revenue by 25-30%. This increase can be attributed to higher conversion rates and reduced cart abandonment.

Additionally, airlines that prioritize local payment methods can enhance customer loyalty, leading to repeat purchases and higher lifetime value. A 2025 study by Deloitte found that customers who use local payment methods are 40% more likely to return for future flights.

• Increased customer retention: Supporting local payments can improve customer loyalty and retention rates.
• Enhanced brand reputation: Airlines that offer localized payment options are viewed more favorably.
• Revenue growth: Airlines can achieve significant revenue growth through optimized payment strategies.

How Citcon Solves This

Citcon offers a single API solution that enables airlines to integrate over 100 local payment methods seamlessly. This flexibility allows airlines to cater to diverse customer preferences while maintaining a secure and efficient payment process.

With support for Buy Now, Pay Later (BNPL) options and compliance with PCI-DSS Level 1 standards, Citcon ensures that airlines can optimize their payment systems while guaranteeing customer security.

For further insights, explore related posts like Pre-Certified Wallet Connections Slash Merchant Onboarding Time and 6 Discoveries Hotels Made About Revenue from Digital Wallets.

What are the benefits of local payment methods for airlines?

Local payment methods provide airlines with increased market reach, improved customer experience, and higher conversion rates.

How can airlines reduce cart abandonment?

Airlines can reduce cart abandonment by integrating local payment methods that align with customer preferences.

What is the impact of local payments on ancillary revenue?

Local payments can increase ancillary revenue by up to 30% by enhancing customer satisfaction and reducing friction in the purchasing process.

Why do customers prefer local payment methods?

Customers prefer local payment methods for security, familiarity, and convenience, particularly in regions with low credit card penetration.

How do local payment methods affect customer loyalty?

Local payment methods can significantly enhance customer loyalty, with studies showing a 40% increase in repeat purchases.

What is the role of market research in adopting local payments?

Market research helps airlines understand local payment preferences, guiding the selection and integration of payment options.

Key Takeaways

• Integrating local payment methods can boost ancillary revenue by 25-30%.
• 70% of travelers abandon carts due to limited payment options.
• 63% of consumers prefer local payment methods over credit cards.
• Airlines that support local payments can improve customer loyalty by 40%.
• Citcon offers a seamless API solution for over 100 local payment methods.