The travel industry presents one of the most complex payment landscapes. High transaction values, cross-border bookings and extended fulfilment timelines all introduce additional layers of risk and operational complexity. For travel merchants, payments are a critical driver of customer experience and revenue performance.
Industry data reinforces this challenge. Payment costs are cited as the leading concern for travel payment leaders globally, followed by cybersecurity and fraud. This highlights the need for a more strategic and optimised approach to payments.
Why travel payments are uniquely complex
Unlike many other sectors, travel payments often involve multiple stages. From initial booking and deposits to final payments and post trip refunds. Transactions are often spread across time and multiple touchpoints. At the same time, merchants must manage multiple currencies, suppliers and regional requirements.
This complexity increases the likelihood of inefficiencies, failed payments and disputes. Without the right infrastructure in place, these issues can quickly impact both conversion rates and customer satisfaction.
Recent industry data highlights the scale of these challenges. According to Statista, 55% of travel payment leaders cite the cost of payments as their primary concern, followed by cybersecurity and fraud at 53% and keeping up with new payment methods at 51%. Additionally, 38% point to chargebacks and refund processes as key issues.
Addressing these challenges requires a strategic and future focused approach.
Managing rising payment costs
Payment costs continue to be a major concern for travel businesses, particularly when operating across borders. Foreign exchange fees, interchange costs and multiple intermediaries can all impact margins.
Travel merchants can reduce payment costs by focusing on the following areas:
Local acquiring: Processing payments locally helps reduce cross-border fees, improve approval rates and lower overall transaction costs, particularly for international bookings.
Payment consolidation: Working with a single payment service provider helps reduce operational complexity, minimise intermediary fees and improve visibility across the payment lifecycle.
Data driven optimisation: Using payment performance data to identify inefficiencies enables continuous optimisation of costs, approval rates and processing performance.
Strengthening cybersecurity and fraud prevention
With over half of payment leaders identifying fraud as a major concern, robust security is critical in the travel sector. High transaction values and card not present environments make travel businesses particularly attractive targets.
A strong approach should combine multiple layers of protection, including using fraud detection tools, Strong Customer Authentication where required, tokenisation of sensitive data and real-time transaction monitoring.
Together, these measures help reduce fraud, protect customer data and maintain a seamless booking experience while supporting compliance and trust.
Supporting new payment methods and traveller preferences
Traveller expectations around payments are changing quickly, with convenience, speed and flexibility now central to the booking experience. Alongside traditional cards, digital wallets, instalment options and local payment methods are becoming essential for improving conversion and meeting customer demand.
Digital wallets: Digital wallets have become a mainstream payment method across the travel industry, particularly as mobile bookings continue to grow. Mobile now accounts for a significant share of total travel sales and digital wallet adoption is widespread, with 74% of travellers relying on digital wallets during trips. Usage is even higher among millennials and affluent travellers, rising to 82%, highlighting how embedded these payment methods have become in the travel experience. This trend is especially strong among younger travellers, with nearly 10% of under 34s abandoning bookings when wallets such as Apple Pay or Google Pay are not available. This shows the direct impact payment choice has on conversion and revenue.
Instalment payments: Instalment payment options are also becoming increasingly important in travel, particularly for higher value bookings. Research shows that more than 10% of travellers would be willing to spend more on their trips if instalment options were available. This demonstrates how flexible payment plans can improve affordability perceptions, reduce booking hesitation and help unlock higher average order values for travel merchants.
Pay by Link: Pay by Link offers a flexible and convenient way for travel merchants to accept payments across multiple channels. By sending a secure payment link via email, SMS or messaging apps, merchants can simplify remote payments, support bookings made offline or over the phone and reduce friction in the payment process.
Alternative payment methods: Local and alternative payment methods are essential for supporting international growth, allowing merchants to offer familiar and trusted payment options in different markets. This can significantly improve approval rates and reduce friction at checkout, particularly in cross-border transactions.
Bank transfers and account-to-account payments: Account-to-account payments are also gaining traction as a cost effective and secure alternative to cards, particularly for high value bookings where customers prefer direct bank based payments.
To remain competitive, travel merchants need to offer a broad mix of local and global payment methods, support mobile first journeys and provide flexible payment options that align with evolving customer expectations.
Minimising chargebacks and disputes
Chargebacks and disputes remain a common challenge in the travel industry due to factors such as cancellations, delays, long booking windows and customer dissatisfaction. These issues can have a direct impact on revenue, operational efficiency and customer trust if not properly managed.
A proactive approach is essential to reduce the likelihood of disputes and improve resolution outcomes.
Travel merchants can minimise chargebacks by focusing on:
- Clear booking terms and conditions: Transparent pricing, cancellation policies and service expectations help reduce misunderstandings that can lead to disputes.
- Accurate transaction information: Clear billing descriptors ensure customers can easily recognise transactions on their statements, reducing unnecessary chargebacks.
- Effective customer communication: Proactive updates before, during and after travel help manage expectations and reduce the likelihood of complaints escalating into disputes.
- Strong dispute management processes: Having structured workflows in place enables faster response times and improves the chances of successful dispute resolution.
Streamlining refunds and cancellations
Refunds are a key part of the travel experience, but delays or inefficient processes can quickly lead to customer dissatisfaction and higher chargeback rates. A smooth and well structured refund journey is therefore essential for maintaining trust and protecting revenue.
Automating refund processes improves efficiency by reducing manual effort, speeding up approvals and minimising errors. This ensures customers receive refunds more quickly, which is particularly important in a sector where expectations are high.
Clear and timely communication throughout the cancellation and refund process is also critical. Keeping customers informed helps manage expectations, reduces frustration and lowers the risk of disputes escalating into chargebacks.
Ensuring compliance with card scheme requirements further helps avoid delays and processing issues, supporting a consistent and reliable refund experience.
An efficient and transparent refund process not only improves operational performance but also strengthens long term customer trust and loyalty.
Navigating regulatory requirements
Travel merchants operate in a complex and evolving regulatory landscape, with requirements such as Strong Customer Authentication under PSD2 in Europe, the EU Package Travel Directive and UK specific frameworks and organisations, including ABTA and ATOL, shaping how payments are processed, protected and secured. These regulations are designed to protect consumers and ensure financial safeguards across the travel journey, from booking through to fulfilment and refunds.
Meeting these standards while maintaining a seamless checkout experience can be challenging, particularly for merchants operating across multiple markets. Without the right infrastructure, compliance requirements can introduce friction and negatively impact conversion rates.
Working with an experienced payment partner helps simplify regulatory complexity, support ongoing compliance and reduce friction at checkout, enabling travel merchants to focus on delivering a secure and seamless customer experience.
Optimising payment performance
Payment performance plays a critical role in driving revenue for travel merchants, as even small improvements in approval rates can have a significant impact on bookings and overall conversion. In a sector where transactions are often high value and time sensitive, failed or declined payments can quickly lead to lost revenue and abandoned bookings.
Optimising performance requires continuous monitoring and data driven decision making. Merchants should regularly analyse authorisation rates, identify patterns in declined transactions and refine payment flows to reduce friction at checkout. Ongoing optimisation of checkout experiences across devices also helps ensure a smooth and consistent customer journey.
Working with a trusted payment service provider can further enhance performance by providing access to global acquiring networks and actionable data insights.
By taking a proactive and data led approach to payment performance, travel merchants can improve conversion, reduce losses from failed payments and maximise overall revenue.
How emerchantpay supports travel merchants
At emerchantpay, we understand the demands of the travel industry and the importance of reliable, flexible payment solutions.
Our global payment platform is designed to help travel businesses:
- Reduce costs through optimised acquiring
- Mitigate risk with advanced fraud prevention tools
- Enhance customer experience with localised and alternative payment options
- Improve performance with data driven insights
With a single integration, merchants can access a comprehensive suite of payment capabilities tailored to the needs of the travel sector.
Contact us to learn more about our solutions and how we can support travel merchants.