Non-bank Financial Institution Casebook

24 | The Problem YeePay sought to replicate its current model with domestic online travel aggregators (OTAs) offering overseas airline tickets and hotels to their end customers after the success achieved in the B2B domestic flight booking market. The inefficiency of the international aviation market provided YeePay an opportunity for its payment services. The majority of travel agents procure international air tickets through a few selected industry intermediaries. Such an existing arrangement is not that favorable for the global airlines given that the intermediaries usually charge them fees per route for facilitating ticket sales. While this cost adversely impacts the airlines’ ticketing revenues, there are limited alternative distribution channels that can rival the current one in terms of efficiency and accommodating the high volumes of timely ticket issuances crucial to OTAs’ daily operations. Even though some airlines attempted to offer lower pricing tickets via their direct sales channels, the challenge in terms of the complex workflow restructuring made it infeasible for OTAs to adopt given their need to make constant seamless bookings. As a result, the intermediary model continued to dominate the market, accounting for 60% of overseas airline ticket issuances to travel agencies. YeePay China Inefficiency of the International Aviation Market Provided Opportunities YeePay is a leading one-stop e-payment service provider in China. With 30 branches in China, its portfolio of solutions cover multiple sectors such as airline, travel, education, insurance, utilities, telecommunications, internet and consumer finance. YeePay offers a single platform that integrates both online and offline electronic payments, and over 20 tailor-made payment products for consumers and merchants to transact securely, conveniently and economically across various channels. YEEPAY