In-Flight Mobile Wallets to Get a Signal Boost

Air travel and mobile apps work well together, with many passengers already using digital boarding passes and having the option to use mobile wallets to pay for food in airports. But that relationship encounters turbulence once passengers board their planes.

In the air, cash and plastic still rule, according to Kristian Gjerding, CEO of CellPoint Mobile, a Copenhagen-based technology company that's developing ways to support mobile wallets for in-flight purchases, with the initial capabilities ready within the next six months.

"Airplanes are one of the few places where mobile payments aren't being used…planes aren't quite ready for that," said Gjerding.

In many cases the passenger cabin does not connect to terrestrial Internet, and personal computing devices are restricted to "airplane mode," shutting down all wireless capabilities including the Near Field Communication system used in mobile wallets.

CellPoint Mobile hopes to bypass those barriers by using a virtual card number that's designed only for use in flight and allows the consumer to securely connect with the plane's wireless network to enable payments. For the consumer, the payment experience is the same with the virtual card as it is with a mobile app in a terminal, Gjerding said.

"This puts a layer between the consumer and the airline that can enable payments to get done quickly," said Vivek Bhatnagar, vice president of presales and solution architecture for CellPoint Mobile.

CellPoint Mobile hopes the airlines will want to accept payments for "ancillaries," or items purchased while in the air, by using the same methods as those accepted on the ground. For a country such as CellPoint's home market of Denmark, consumers are less accustomed to using paper money, or even carrying it, Gjerding said.

"Airlines are increasingly using onboard WiFi, not yet for payments, but we see that coming down the line," Gjerding said, adding there's additional incentive to remove the burden of using heavier point of sale devices to accept plastic card payments or cash on board planes.

Companies have been trying to add new technology for in flight payments for years. MasterCard tested contactless payments aboard plans as early as 2011. U.S. Bank has developed a digital payments system that allows pilots to combine payments with other tasks. And among airlines, JetBlue has added Apple Pay for certain flights.

Mobile payments have also advanced outside of planes at airports. Private jet operators offer mobile apps to book and pay for flights. Commuters can use a mobile app to book and pay for the Toronto UP Express train that runs between Union Station and Pearson International Airport. And NCR and MasterCard have long pushed mobile payments technology for stores inside airports.

There is a potential market for onboard mobile payments—WorldPay reports about a third of flights will have mobile payments capabilities by the end of this year.  

"There are certainly transactions that take place on a plane and they will increase I suspect. On demand content for example, or the ability to order certain services in advance from your seat," said Gareth Lodge, a senior analyst at Celent. "They're currently cash or cards."

Other than the technological limitations, there are business concerns preventing some airlines from expanding their payment options aboard planes, Lodge said. "There are dozens of wallets…choosing and supporting the right ones [is a challenge]."