“Let’s dive right in,” says Shennish, “and explore what crypto payments have to offer for both businesses and their clients.
“According to statistics, more than 80 per cent of wealthy millennials keep at least part of their savings in crypto. On the other hand, only four per cent of Baby Boomers and 25 per cent of the Generation X demographic have ever owned a cryptocurrency. Over time, however, it appears that more and more people from Generation X are adopting crypto for direct purchases, with Zoomers also becoming increasingly clued up about using cryptocurrencies as a payment method. As the generations born between 1963 and 1996 begin to dominate the retail markets, more and more people will choose to pay for goods and services with cryptocurrencies when given the opportunity, even for private jet charters.
"In order to understand the feasibility of crypto payments, as well as gain a degree of insight into the way the industry is heading, it’s worth taking a look at some of the private aviation businesses reaping huge rewards from offering cryptocurrencies as a payment method. PrivateFly recently stated that around one fifth of its annual revenue now comes from digital currency payments, and Fast Private Jet has declared that a third of all customer transactions now happen through crypto services. Mirai Flights has introduced a new instant flight booking service using cryptocurrencies, where customers can purchase a ticket for a charter flight in a single click.
“Notably, these three brands all claim significant revenue growth after introducing this payment option, and company representatives say interest in crypto is rising dramatically, with digital money holders more likely to spend large sums on expensive flights compared to those who pay using cards, SWIFT or SEPA.
“The success of these three industry pioneers shows promise for cryptocurrencies as a payment method and demonstrates that a significant number of private aviation clients are happy to use digital money to pay for jet charters when the opportunity arises. So, why should private aviation companies add crypto to their payment methods, in addition to the multiple options already available?
“The demand is growing. More and more entrepreneurs, C-level executives and other wealthy individuals want to fly on private jets, and as demographics shift in favour of gen X and millennials, this shift will continue to accelerate. Put simply, this is a trend that can only go in one direction and, according to data from Ecommpay, 20 per cent of private jet users would pay using crypto if offered the opportunity.
“Crypto boasts extremely fast transaction processing times. Unlike large payments sent via traditional services that can take hours – or even days – to arrive, crypto transactions are processed quickly and, in some cases, instantly. This makes it a perfect fit for private aviation, where last minute bookings are now very much the norm.
“There are no limits on transaction sizes. The absence of limits is especially important when paying for private jet services, since charters are often expensive, typically 10,000-100,000 euros, and sometimes even more. Traditional card operations rarely allow paying for such large value items in a single transaction, which means some clients have to split payments into several smaller amounts, a process that can trigger anti-fraud systems and result in a declined payment. Crypto, in contrast, allows large sums in a single transaction, with fast processing times and minimal fees.
“Crypto allows clients to pay for services at a minute’s notice. While card, bank and SEPA/SWIFT payments work on schedule and are not always available, during bank holidays for example, cryptocurrency services process transactions whenever the user needs them. That means there's no need to plan a trip and purchase a ticket for a private flight six months in advance; clients can simply make a last minute booking whenever the need arises.
“Booking a private jet charter using a cryptocurrency service is an opportunity to quickly, safely and conveniently pay for a flight without worrying about limits and fees, and represents a fantastic opportunity for aviation operators to attract new clients.
“But what about the cons? What are the risks and limitations?
“It is vital to consider the risk of devaluation. Some tokens, such as the recent example of Luna (a cryptocurrency used to back the stablecoin terraUSD that crashed and lost investors a total of $25 billion), might lose 99 per cent of their value in a single day. So, it’s important to carefully analyse which currencies to hold, as well as which ones would be most suitable to offer as payment options.
“Despite the popularity of cryptocurrencies, there is still a slight distrust and lack of knowledge surrounding the technical operations happening behind the scenes of this relatively new financial instrument. Finding and analysing information about implementing cryptocurrencies can also require a great deal of time and effort.
“The volatility of cryptocurrencies can also be a distinct disadvantage. However, this problem can largely be solved by only working with stablecoins at a rate tied to a fiat currency. On the other hand, a payment provider may offer the option of fixing the exchange rate at the time of payment, for around 20 minutes, allowing the customer to make their purchase without worrying about rate changes or constant price fluctuations during checkout.
“Lastly, some people still regard them as unregulated and prone to scammers. However, if a company processes cryptocurrencies through a reliable payment provider that works using official licences and regulation, this should not be a problem.
“As an aside, here’s a little tip for choosing a worthy payment provider: before entering into any kind of cooperation, ensure that the company has implemented know-your-customer and know-your-business checks. KYC is verification of a person’s identity: full name, date of birth and address, while KYB is verification of business: is the company registered with Companies House, who has significant control, who are the beneficiaries?
“These kinds of preventive measures will help to ensure the provider is legitimate and guarantee that their crypto service will be well-regulated.
“In general, the private aviation industry is still hesitant to trust cryptocurrencies as stable and legitimate, with only a small percentage of firms offering this payment method to book their services. On the other hand, the number of millennials who fly on private flights is steadily growing, and well-heeled members of this generation increasingly prefer to pay for large purchases using digital money.
“Overall, it appears that expanding the list of available payment options to include cryptocurrencies is a good prospect for most private aviation businesses, and operators who aren't willing to adapt or take into account the needs of a new generation of fliers, risk losing out on a significant percentage of their target audience.”
Ecommpay is an international payment service provider and direct bank card acquirer with its own fintech ecosystem that allows online payments and payouts globally.