From the Global Trends Report for the World Travel Market by Euromonitor International that was released during WTM last week in London. One of the sections highlighted dealt with India. Here are some highlighted points culled from the report.
- India remains a predominantly rural country with over 66 percent of the population living in rural areas, with cash purchases the only option for payments.
- As only 7 percent of India’s villages possess a bank, these rural consumers make up the majority of India’s unbanked, an estimated 500 million people in 2015, according to the Bank of India.
- For many of these consumers, travel and online booking of tickets may appear an unrealistic dream, but the situation is slowly changing as travel companies reach out to the unbanked.
The Cash on Delivery (CoD) payment model has seen great success with online retailing, and a number of travel companies have recently established a service for ticketing.
- Consumers book a ticket online, often using a travel agent or internet café, and a cash payment is collected after which the ticket can be downloaded or delivered.
- Jet Airways has signed up with GharPay, which specializes in CoD payments, enabling customers to book their tickets online, and tickets are emailed after the payment is collected.
- Internet access for India’s rural population and smaller cities looks set to expand dramatically, leading to over 320 million internet users by 2019.
- This improved internet access, combined with a growing availability of mobile phones, is likely to result in increased mobile payments and applications for unbanked consumers.
- In August 2015, 11 companies-including Airtel and Vodafone-were granted licenses for banking transactions such as deposits and payments, but not loans.
- This move aims to bring mobile banking to India’s unbanked, similar to Kenya’s M-Pesam-commerce, used by two thirds of adults in Kenya to make purchases, including travel.
- Cash on delivery is not restricted to transportation ticketing; Travelguru, the hotel booking site, also offers this service, provided by the doorstep, cash payment brand, Delhivery.
- Cleartrip, one of India’s leading OTAs, reported that 26 percent of online users and 18 percent of mobile users prefer to pay for all their travel bookings by the cash on delivery method in 2015.
- For many emerging markets, these types of purchases can be seen as a way of creating trust in online bookings as payment and ticket delivery are carried out at the same time.
