Travelfund, a travel technology company, has launched a new service, Fly Now Pay Later, which allows customers to take their holiday before they pay in full for it.
The company is targeting to fund around 130,000 holidays over the next 18 months, and the new service will allow customers to open an instant credit account of up to £2,000 to fund their holiday with travel brands that consumers know and trust. They can use their credit account to pay for individual holiday elements, such as flights or hotels or a combination, or a tailored holiday package.
The service means that holidaymakers can spread the cost of their holiday over a period of up to 12 months from the time of booking, with no hidden costs and no redemption penalties for early repayments and overpayments. The APR rate will depend upon the individual’s credit score and risk profile, with the majority expected to incur a rate of around 19.9%. This largely reflects the rates of credit cards and personal overdrafts, and is expected to fall as the product is better understood.
Agents will initially need to make their clients' holiday bookings through TravelPack, and the loan funding will be provided by APS, which is authorised and regulated by the Financial Conduct Authority as a consumer lender.
The new service will offer travel agents, operators, airlines, hotel booking and villa websites a new software-as-a-service (SaaS) platform to help increase conversion rates, deliver incremental revenues and reduce online payment transaction costs significantly.
The paperless platform fits into travel operators’ existing booking processes, is easy to integrate, run in real time and will help customers to more effectively plan their holiday. This can help increase tour operators’ revenues and profitability because customers can easily upgrade their room or hotel, extend their holiday or book additional excursions.
Operators will receive the full balance of the holiday at the time of booking; the service uses payment card technology to pay its travel partners so authorisation and settlement flow through operators’ existing channels, making integrating simple and at virtually zero cost.
The company's CEO, Jasper Dykes, 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."