Book Online, Pay Offline: Back to the Future with Nok Air

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Last night I attended the first Web & Social Analytics Meetup in Bangkok at which the guest speaker was Sirinun Jiradilok, VP of Information Technology for Nok Air, a Thai budget airline. Her talk revealed a lot about how, in the rush to digitise everything, some businesses may be ignoring a huge number of potential customers.

In 2010, just as online travel booking was really exploding, Nok Air did something counter-intuitive, and invested a lot of time and money in offline payment technology. Yes, you heard correctly, offline payment.

Why, in a world rapidly moving away from paper money, and where everything is available online with a credit/debit card, would Nok invest millions of baht to enable people to pay with good old-fashioned cash?

nok air presentationIt’s actually pretty simple. Beyond the gleaming skyscrapers and shopping centres of Bangkok, Thailand remains a largely rural country. Large numbers of provincial Thais don’t have bank accounts, and even those that do have a healthy old-school mistrust of credit cards. In short, they like to use cash. And as Nok Air serves a lot of little known provincial destinations that other domestic airlines don’t, these people are all potential Nok customers. So how do you get them to book? Simple – make it easy for them to pay in a way that makes them feel comfortable.

So what Nok did was to partner with Thai banks and the country’s huge network of nearly 9,000 7-11 convenience stores to enable online bookers to pay over the counter. The customer books online or via a very user-friendly smartphone app and gets a digital receipt, which they take to the counter at their local bank or 7-11 within a certain time limit for payment. Easy!

And the results have been very surprising indeed. Since 2010, credit/debit card payments for Nok Air flights have decreased from 60% of the total to a little over 40%; meanwhile, over-the-counter offline payments have increased from 10% to almost 30%. And as Nok is now paying out less in credit card merchant fees, their profits have increased too!

As Nok moves into Myanmar and Vietnam, countries which have even lower credit/debit card adoption than Thailand, and as other airlines adopt the technology, we can expect offline payment to increase throughout the Southeast Asia region in the years to come.

So think about it – are you making it easy for ALL your potential customers to pay? In your rush to maximise online bookings, have you ignored your less tech-savvy customers? Is there still a place for the “old ways” in your business?

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About Author

Tim is one of representasia’s co-founders and the company’s CMO. He has been in the tourism industry since 1992 and has worked in Paris, London, Saigon & Bangkok. He has a strong background in operations, technology, sales & marketing. Representasia is his second business venture, following his founding of a successful Vietnam DMC in 2009.

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