Five Questions with Esperanza Fernandez, Airlines, Mastercard

We caught up with Esperanza Fernandez, Director, Airlines, Mastercard to get her thoughts on the challenges and opportunities airlines face as they continue to adjust and grow post pandemic.

1. Tell us a little about your role and focus on airlines at Mastercard.

My role encompasses a couple of aspects; 1) a focus on airline payments in general, whether that’s educating acquirers about Mastercard rules and requirements when processing airline transactions, or advising airlines on best practices to improve overall performance such as approval rates or fraud reduction and, 2) a focus on expanding the benefits of virtual cards to airlines through the Mastercard Wholesale Program. It’s a solution that has recently been enhanced to bring further benefits across the travel value chain. Helping airlines to better understand how virtual cards benefit them, their distribution partners and their customers is an important part of my role.

2. What are some of the biggest challenges airlines face today?

Growth is essential for the travel sector, and while we see much opportunity ahead across all regions, maximizing sales is vital for airlines. One of the challenges airlines face is how to capture growing demand beyond their own direct sales channels, in a very competitive landscape. Unlocking this opportunity to maximize sales with no restrictions, and contributing to quick cash flow generation is vital after two years of travel limitations, low demand and tight cash reserves.

3. What is Mastercard doing to help airlines address these challenges?

To help airlines embrace the indirect sales channel and boost all potential sales opportunity we have evolved our virtual card solution, the Mastercard Wholesale Program, to better support B2B payments between airlines and their distribution partners.

Now providing more flexible and dynamic IC tier levels, airlines can work with their travel partners and negotiate/agree the best price depending on product, market and currency to ensure that the payment terms are mutually beneficial while protecting and boosting cash flow for all parties.

We have also developed data-based solutions for airline acquirers to have a more accurate picture of the actual versus perceived risk associated with processing travel merchant volume. The T&E Risk Monitor we launched in partnership with Actuary is providing greater transparency across the travel ecosystem, increasing confidence and reducing excessive requests for collateral, and immobilized cash deposits.

4. What is a common misconception / myth you hear around airline payments?

There are a few comments that we hear often and are based on myths and misconceptions, here’s a couple that I hear most frequently;

“Airlines have very low approval rates, with high levels of fraud” This is a completely erroneous idea. Airline merchants in general have some of the highest approval rates with quite low overall fraud levels compared to other verticals and industries. According to Mastercard’s recent analysis the FY2022 average approval rate for the airline industry was 94.4% with a fraud rate of only 0.08%. (Source: Mastercard authorization data, FY2022. Scope: 190 airlines merchants from all regions, and all business sizes)

The cost of virtual cards is high compared to other commercial cards > Again this a misconception, Mastercard has developed a specific pricing structure under its Mastercard Wholesale Program designed to provide flexible pricing through dynamic IC tier levels. These provide fixed regional acquiring costs that provide a very similar if not lower cost than other standard commercial or corporate cards.

5. What is the biggest untapped opportunity for airline payments?

We are in a moment of strong demand, and growth opportunity with Mastercard data insights showing that customers are spending on travel and experiences ahead of other merchant categories. It is important that airlines capture this momentum and maximize all sales potential by working closer with their travel distribution partners to reach that global demand, with no sales limitations or restrictions.

To learn more about how Mastercard is powering the travel economy and empowering airlines and travel intermediaries through the Mastercard Wholesale Program, connect with Esperanza directly on?LinkedIn?or contact Mastercard’s global B2B Travel team at?[email protected].