The world’s love for travel is reaching new historic highs in 2024. According to UN tourism, international tourism is expected to increase by more than 15 percent this year compared to the previous year, surpassing pre-pandemic figures. By 2028, Skift Research estimates that travellers globally will take 1.4 billion cross-border trips - a 17 percent increase from 2019. 

This expansion of global travel is a welcome boost for travel businesses like online travel agencies (OTAs), tour operators, and destination management companies. In fact, according to 2024 State of Payments in the Travel Industry, a joint report by Airwallex and Skift, 75 percent of the 500 global travel executives interviewed reported that they earned more than one-quarter of their revenue from cross-border payments. 

However, the survey also found that more than two-thirds of travel finance executives reported that outdated or complicated payment systems are directly impacting their organisational efficiency and profit margins.

To take full advantage of the travel boom, OTAs need to think strategically and globally when approaching how they manage their travel payment processing. Here’s what you need to know when choosing the right travel payment processing solution to empower, scale, and grow your OTA.

In summary:

• Although the travel industry’s growth is a win for OTAs, increases in cross-border transactions amplify many issues across the payment lifecycle.

• In this environment, OTAs need to think globally and adopt travel payment processing solutions that can handle different currencies and FX market volatility.

• Core features for great online travel payment processing solutions include seamless payment collections in multiple currencies, fast payouts to suppliers and vendors, and transparent and competitive FX rates.

• Airwallex allows OTAs of all sizes to grow globally and revolutionise their payment and financial operations with its travel payment processing solutions. By using an end-to-end payment solution, you can keep all of your payment processes in a single platform while improving your profit margins.

Read Airwallex and Skift’s latest research report, 2024 State of Payments in the Travel Industry, to find out why leading travel companies are adopting end-to-end payment systems such as Airwallex for their travel payment processing needs. 

What is travel payment processing?

Travel payment processing is completed through payment gateways, interfaces that collect consumer payment information. Merchants use this technology to accept travel purchases from customers using a debit or credit card. 

The term payment gateway not only relates to the physical card-reading devices (point-of-sale terminals) you see in stores, but also the travel payment processing portals (or ‘checkouts’) found in online stores. 

Travel payment processing can also involve the outbound payouts made by travel companies to their vendors and suppliers, such as tour providers, airlines and hotels. 

Payment gateway vs. payment processor

One distinction to make is that travel payment processing gateways are different from ‘payment processors’. Payment processors are a service that connects the customer’s bank to the merchant account, facilitating the actual movement of money. 

Think of it as two halves; the payment gateway collects the customer’s information for the payment, and then the payment processor uses that information to take the money out of the customer’s account and credit it to the merchant.

How it looks: Payment processing

Often, however, payment providers perform multiple functions within the payment process. For instance, Airwallex is a gateway, processor and acquirer all in one.

How does travel payment processing work?

Travel payment processing involves facilitating financial transactions between OTAs and the travellers making bookings with them, as well as making payments to the OTA’s suppliers and vendors across the globe. 

Whether it’s a hotel, flight, rental car, tour or other travel-related booking, the traveller’s payment information is transmitted through a payment gateway to the OTA’s bank. The OTA’s acquiring bank will then forward the payment to the traveller’s issuing bank for authorisation. Once the funds have been verified and approved, the payment is processed and the OTA’s systems will usually issue a confirmation to the traveller that their booking is now complete. 

Travel payment processing is more complex than payments from other types of vendors. OTAs often deal with cross-border transactions, so currency conversion and fraud protection are especially important.

Although the travel industry’s growth is a win for OTAs, increases in cross-border transactions can complicate the payment lifecycle. For example, collecting payments from customers and paying suppliers globally can complicate financial reconciliation, leading to significant operating costs in extra fees and staff time. 

In our 2024 State of Payments in the Travel Industry report, the travel executives we surveyed said they faced a myriad of travel payment processing challenges as they sought to drive brand differentiation and boost travel bookings globally. 

Some examples of these challenges included:

• Manoeuvring through regulatory and banking system hurdles

• Finding solutions for offering local payments to a growing global customer base

• Avoiding high FX fees on cross-border transactions

• Streamlining supplier and vendor payouts across currencies

• Accurately reconciling bookings, payments, commissions, and refunds across multiple fragmented systems

How is travel payment processing evolving?

Travel payment processing has transformed significantly thanks to technology. Consumers originally used cash or checks as their preferred form of payment, requiring them to make in-person transactions at a travel agent or book over the phone. Credit and debit cards were then introduced in the 1940s, enabling more convenient online bookings and faster payments for businesses, consumers, travel agencies, hotels, airlines, and tour operators. 

Today, online bookings are now standard. OTAs use safe and reliable digital payment gateways to allow customers to pay quickly and securely when planning their trips. 

Other payment solutions, such as digital wallets, contactless point-of-sale terminals, and peer-to-peer payments apps have offered travellers even greater convenience and flexibility, with innovations in data encryption and fraud detection bolstering security and safeguarding financial information when booking online.  

With all this change, if you’re an OTA wanting to stay ahead of the curve, you’ll want to invest in your travel payment processing technologies and financial operating systems. 

In fact, 90 percent of travel executives Airwallex and Skift recently surveyed in the 2024 State of Payments in the Travel Industry report said they were “prioritising upgrades to their payment and financial operating systems” – and it’s easy to see why. Pursuing frictionless travel payment processing journeys for travel customers is a surefire way to boost bookings and expand market reach.

Learn more about payment processing.

Core features for an online travel payment processing solution

Although OTAs will have slightly different needs for their travel payment processing solutions, there are a few core (and some out-of-this-world) features that can transform the way businesses process their travel payments for the better. 

Multi-currency accounts

• Provides direct connections to local banks in one platform

• Allows payment collection from international customers in their preferred currencies and methods

• Enables fast international transfers to suppliers and vendors that leverage local payment rails versus SWIFT

• Comes with built-in fraud detection and robust compliance frameworks

FX management and margin protection

• Receive and pay out funds in the currencies you usually transact in with multi-currency accounts 

• Access competitive and transparent FX rates with the option to lock in rates to manage currency fluctuations in volatile markets

Supplier and vendor payment reconciliation

Reconcile finances between customer bookings and supplier and vendor payments. This reconciliation makes it simple to automate data entry, match transactions, and identify discrepancies to help your OTA stay compliant.

Simple integration and automation

• Customise the checkout and payout experience through flexible and simple integration options 

• Integrate with popular accounting systems for seamless data syncing, so you’ll be up and running faster

• Automate key processes for more accurate reconciliation, reporting, and compliance

Features that promote new revenue streams

• Build and launch branded financial products to travellers, suppliers and vendors

• Access revenue-sharing opportunities through FX markups and card interchange fees

Questions to ask an online travel payment processing provider

If you’re an OTA, big or small, choosing the right travel payment processing provider is your key to scaling globally. To keep a competitive edge, here are the questions you should ask when considering a travel payment processing provider:

• Do you offer multi-currency payment processing?

• How do you manage your FX rates? Are they competitive and transparent? 

• What reporting features does your platform offer?

• What security features does your platform include?

• What’s the integration process with our existing systems, such as our booking systems and CRM tools?

• How quickly can we set up the platform?

• Can we manage all payment processes and financial operations via one interface, or are there multiple?

• What ongoing support do you provide?

• What are your fees?

• Do you offer virtual cards for employee expense management?

How Airwallex’s financial platform meets your global ambition

Having a unified payment and financial operations platform is an absolute must for handling travel payment processing, especially as the travel industry grows. Consolidating your financial tech stack can help your OTA grow globally, improve profit margins, and compete with industry giants.

This is where Airwallex comes in. We’re the one-stop-shop for all your global financial operations.

Accept payments and process vendor payouts globally

With our platform, you can: 

• Open an account in more than 60 countries with local bank details (so you don’t have to set up local entities manually)

• Make local transfers to more than 150 countries 

• Accept payments from more than 180 countries

• Issue virtual multi-currency cards in more than 40 markets

Airwallex lets you manage all of your payments and payouts in a single platform, where you can manage your multi-currency balances and expenses. Our platform also offers competitive FX rates that also allows you to earn valuable interchange rebates.

Sound like something that would revolutionise the way your OTA manages travel payment processing? We agree. With more than 100,000 companies around the world trusting Airwallex’s software and APIs to simplify their financial operations, we want to help your travel business unlock new opportunities and grow without limits. See how Airwallex can help your travel business. Sign up today.