In a time when so much disruption is happening in the digital space, the best fintech companies are those that relentlessly innovate customer experiences and drive efficiencies into their operations. On the horizon, eSIM technology is one such development. How could eSIM technology further integrate into, or even revolutionize, the business model for travel fintech companies?
Let’s unfold the game-changing possibility that would open possible business models and huge benefits that come along.
A New Chapter in Travel Fintech
Imagine this: Sarah, who happens to travel frequently, arrives in Tokyo. Her visit is going to include business meetings followed by some time off. But instead of running around in search of a local SIM or going through exorbitant roaming charges, she’ll easily connect to the local networks with her eSIM on her smartphone. All works fine for Sarah, impressed by the simplicity of everything. This is what traveling in the future will look like; this is what eSIM can do. For fintech travel companies, the integration of eSIMs is still an option, but it would really prove to be a game changer.
eSIM stands for Embedded SIM. It is installed directly into a smart device or some other device, unlike what was done with older versions of SIM cards. They enjoy all the connectivity features, albeit certainly with added flexibility and convenience.
According to a GSMA report, the global eSIM market will grow by an outstanding compound annual growth rate of 15.2% from 2022-2027. Surely, such explosive growth stands as a testament that integration with eSIM technology helps business, including travel fintech.
The Travel Fintech Landscape
The travel fintech sector focuses on delivering solutions in the financial area that are exclusively developed for travelers. This sector will range from travel insurance and processing of payments to currency exchange and has recently added an eSIM-based solution for connection. Integrating eSIM into the offer can allow fintech companies to considerably raise customers’ happiness and loyalty at a time of growing demand for seamless experiences when it comes to travel.
1. Direct Sales Model
Of all the strategies, the direct sales model is probably the simplest for fintech travel companies. The concept allows businesses to sell eSIM data plans directly from their mobile apps or websites. Partnering with eSIM manufacturers, FinTech companies can let tourists buy region-specific data plans that meet their requirements and reduce their spending on conventional roaming costs.
Advantages:
Cost Savings for Customers: The cheapest rate on an eSIM data plan will attract those thrifty tourists.
Improved Customer Experience: An easier process for purchasing an eSIM plan might help to enhance the satisfaction index for all categories of customers.
2. Commission-Based Model
The Commission-Based Model offers a low-risk way for businesses that are quite scared of venturing into direct sales. In this case, reputable eSIM service providers can collaborate with travel fintech companies to get commissions from platforms’ sales.
Advantages:
Low Entry Costs: Ideal for startups or those business entities newly adopting eSIM technology, this technology requires an investment of very little money in the start-up stage.
Scalability: Businesses can move into more complex integration as they gain the benefit of experience.
3. Upselling or Cross-Sell Model
With the Cross-Sell or Upsell Model, through ancillary services such as an eSIM, fintech companies are able to provide services that were previously tied to other products in the travel domain, like payment solutions or travel insurance. Ancillary services help businesses add value to their main products.
They can bundle services with local telecom operators, airlines, and even travel agencies. For example, with an airline integration, while booking a flight, she may sell their eSIM packages or, using the integration with a hotel chain, offer guests an eSIM plan at their special discounted rate.
Such partnerships are able to create value added for the customer and open new revenue streams for the travel fintech. In a report, McKinsey & Company argues that firms that form strategic partnerships may gain up to 25% market share, underlining the potential of such collaboration.
Advantages:
Bundling services can increase average transaction values and, hence, will increase revenue per customer.
Incremented Customer Retention: Such additional services may increase customer loyalty and repeat business.
4. Subscription-Based Method
Another creative strategy in this venue is the subscription model, wherein users are charged a recurrent fee for their eSIM services. This model would particularly interest people who travel the world and require connectivity.
Advantages:
Predictable Revenue Streams: A subscription model provides steady revenue streams, which are valuable for improved financial planning.
Customer Loyalty: In instances where the provider succeeds in satisfying the subscribers on a regular basis in terms of connectivity needs, they may be most likely to remain with it.
5. API Integration Model
On the other side, any travel fintech company with basic technical skills could integrate eSIM functionality into their existing platforms at the very moment using the API Integration Model. Through the API of eSIM providers, a business will be able to give its customers customized and unique solutions for connectivity.
Advantages:
Improved User Experience: The eSIM functionality can be integrated by businesses through APIs, which will help to deliver a unified and intuitive customer experience, reducing much of the friction and make the process of staying connected while traveling easier than ever.
Scalability: The API Integration Model also provides easy scalability. As a company grows its customer base, it efficiently scales up its eSIM offerings without significant technical overhead. In other words, since APIs are flexible, they will scale a business’s connectivity solution with growing demand, letting them serve more users and add features as required.
Conclusion
The application of eSIM technology into a travel fintech business model opens the possibility for the maximum level of offer enhancement, customer satisfaction, and the creation of new revenue streams. Furthermore, fintech firms can position their companies at the very top of the digital revolution about to happen in the travel sector simply by models such as direct sales, commission-based partners, and subscription services.
As demand for seamless connectivity continues to surge, embracing eSIM technology is going to be useful not only for travelers but also for the empowerment of fintech companies in the competitive market. A bright future of travel fintech will definitely be aligned with the progress of eSIM technology in unlocking new ideas to serve evolving needs of the modern-day traveler.
Download:
ZetSIM App from the Google Play Store
