For Transportation Companies, a Seamless Delay Repay Process Is Becoming a Key Differentiator

On a Monday morning last month, entrepreneur Rupert McKillop left his home in Oxfordshire with plenty of time to arrive at his London office on time via train. He had plans to meet with an important client and knew that holding the meeting in person would be crucial for building trust. But when he got to the station, Rupert learned all trains had been canceled because of a disruption.

Frustrated, Rupert returned home and was able to reschedule the meeting online. Just as importantly, he was able to apply for a refund for the cost of the ticket.

“I opened my Trainline app, clicked refund ticket and had the money sent to my account within minutes,” he says.

Repays are on the rise

With return to work, more commuters throughout the U.K. are taking advantage of Delay Repay, a nationwide program that makes it easier for train customers to get reimbursed. Since 2016, train operators have worked to compensate customers like Rupert for trains delayed by 15 to 30 minutes or more. From 2022 to 2023 alone, U.K. train operators reimbursed a total of over £101 million to customers.

Compensation for travel disruptions is expected to increase in the coming years across various modes of transportation. In the EU, air passengers are already entitled to compensation if their flights are delayed or canceled for reasons besides “extraordinary circumstances” like weather, security risks or political instability. And in the U.S., a new rule issued by the Department of Transportation (DOT) requires airlines to promptly provide passengers with automatic cash refunds when flights are delayed or canceled.

Customers today expect the compensation process to be as easy as it is to pay for the ticket. As transportation providers compete with each other for customers, an easy refund process is crucial as it helps them maintain customer loyalty while reducing the time and expense spent on customer service call management.

The complexity of repayments

But the truth is, while Rupert was able to quickly and easily get his refund, making these repayments can be incredibly complicated behind the scenes.

“Passengers may have purchased their ticket from a third-party seller. They may have paid in cash at the station. In the time between when they bought the ticket and asked for a refund their card may have expired,” says Alan Irwin, Vice President of Product & Solutions Europe at Global Payments, which manages repayments for 14 of the 28 train companies in the U.K. “And if the traveler is a tourist or someone traveling for business, their card may have been issued in another country which can make managing refunds particularly tricky.”

“With more and more people traveling these days, there is an increased need to ease the compensation process when people experience travel delays,” says Tulsi Narayan, Head of Commercial & New Payment Flows Europe at Mastercard. “That means making repayments near real time, giving passengers a choice in how they receive their repayment regardless of how they paid, and having the ability to make repayments across country lines.”

The future of delay reimbursements is digital

The solution for transportation companies around the globe is payment reimbursement systems that are digital, seamless and integrated. For travelers, it means they can request a repayment with the click of a button, instead of having to go to a website and searching for how to ask for compensation and then having to complete lengthy and complicated forms.

Fast, easy and intuitive repayment options, whether through mobile apps, contactless systems or even automatic refunds to a digital wallet, are likely to encourage more people to use public transport, ride-sharing or other mobility services.

“As global standardization efforts continue, and people increasingly turn to digital payments, travelers can expect a more interconnected and user-friendly repayment experience, regardless of where they are in the world,” says innovation futurist Shivvy Jervis. “This future promises not only convenience but also a more efficient and equitable transportation system, even across borders.”

Mastercard is helping make this future a reality with Mastercard Move’s money movement capabilities. Mastercard Move enables financial institutions and payment service providers to facilitate near real-time payments to customers’ preferred end points. These include billions of cards, as well as bank accounts and digital wallets in over 180 countries.

Narayan and Irwin anticipate transparent and efficient digital reimbursements becoming an integral part of the business operations of transportation companies in the coming years.

Shifting to a more efficient payments system “directly influences how companies attract and keep customers, streamline operations, and stay ahead in a competitive market,” Narayan says. “As payment methods become integrated and digital, companies that embrace these changes can offer a smoother and more efficient experience for users, which is a big draw.”

For further information about Mastercard’s money movement solutions, visit the website.