A start-up which has developed a Fly Now Pay Later model for travel firms is aiming to fund 130,000 trips in the next 18 months.
Travelfund has launched its new service which is says has the potential to boost tour operators’ performance and profitability.
It has partnered with tailor-made-holiday specialists TravelPack and payments specialist Advance Payment Solutions LTD (APS) to launch this service.
The firm plans a full commercial roll out of the Service as a Software (SaaS) product, with a much broader range of travel partners later this summer.
Jasper Dykes, TravelFund chief executive, said: “Our service is a first for the UK market giving hard-pressed consumers a new, very affordable option to pay for their holidays, giving them a greater ability to make this discretionary lifestyle purchase.
“We are partnering with a responsible FCA-authorised lender and payments provider, offering financial protection, flexible repayment terms and no transaction fees.
“The service offers travel operators the opportunity to help increase conversion rates, deliver incremental revenues and reduce online payment transaction costs significantly and we believe it will bring great benefits, such as increasing consumer choice, boosting bookings and travel operator profitability, helping to spur travel market efficiencies and the sector’s overall growth.”
TravelFund allows customers to open an instant credit account of up to £2,000 to fund their holiday with known travel brands they trust.
This credit can be used to pay for individual holiday elements, such as flights or hotels or a combination, or a package.
The obvious advantage for the consumer is it enables them to fly before they pay in full and spread the cost of their holiday over a period of up to 12 months from the time of booking.
For operators, they receive the full balance of the holiday at the time of booking, which significantly benefits their cash flow.
It is also expected to significantly improve conversion rates for a range of travel firms including agents, tour operators, airlines, hotel booking and villa websites.
TravelFund says there are no hidden costs and no redemption penalties for early repayments and overpayments.
The APR rate depends upon the individual’s credit score and risk profile, with the majority expected to incur a rate of around 19.9% which is expected to fall as the product is better understood.
The paperless platform integrates into travel operators’ existing booking processes and can help tour operator increase revenues by pushing hotel upgrades, longer durations or additional excursions.
The service uses payment card technology to pay its travel partners so authorisation and settlement flow through operators’ existing channels.
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