Travel firms are adopting ‘cash-on-delivery’ payments to cater for the half a billion Indians without a bank account, says the WTM Global Trends Report 2015, in association with Euromonitor International.
Released today (Monday 2 November) at World Travel Market London, the report highlights the scale of the untapped market of India’s unbanked population, and how cash-on-delivery (CoD) models are evolving to serve these consumers.
According to the WTM Global Trends Report 2015, in association with Euromonitor International, which is celebrating its 10th anniversary at WTM London 2015, more than two thirds of India’s population live in rural areas and only 7% of India’s villages have a bank.
These countryside consumers make up the majority of India’s unbanked – an estimated 500 million people in 2015.
“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,” said the report.
CoD payments have been successful with online retailing, so several Indian travel companies have now adopted the service for ticketing.
Consumers book 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 specialises in CoD payments, enabling customers to book online, and tickets are emailed after the payment is collected.
Indian Railway Catering and Tourism Corporation (IRCTC) established BookMyTrain.com, which allows passengers to book online, for the ticket to be delivered at home where the payment is made.
CoD is not restricted to transportation ticketing, said the report.
Travelguru, the hotel booking site, also offers this service, provided by doorstep CoD brand Delhivery.
Cleartrip, one of India’s leading online travel agencies, reported that 26% of online users and 18% of mobile users prefer to pay for all their travel bookings by CoD in 2015.
The report highlights the potential for significant further growth, commenting: “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 licences for banking transactions such as deposits and payments.
“This move is hoped to bring mobile banking to India’s unbanked, similar to Kenya’s M-Pesa m-commerce, used by two thirds of adults in Kenya to make purchases, including travel.”
World Travel Market London, Senior Director, Simon Press said: “The sheer scale of this untapped market is staggering, so it’s great to see how technology is bringing travel opportunities to millions of consumers.”
Euromonitor International, Head of Travel, Caroline Bremner said: “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.
“It will make a dramatic difference to huge numbers of people who have previously been unable to enjoy benefits afforded to those in more developed economies – and open up many opportunities for the travel industry in India and around the world.”
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