Travel payments are not a side project

This article is based on the episode of Everywhere Commerce: The hardest payment in the world. Follow Everywhere Commerce wherever you get your podcasts.

Travel is one of the hardest industries in which to get payments right.

The problem is not a shortage of technology. It is that travel businesses face nearly every difficult payment problem at once: global demand, high transaction values, different local payment cultures, complex supplier relationships, fraud exposure, and a long gap between payment and delivery.

Travel and tourism contributes around US$10.9 trillion to the global economy and supports more than 357 million jobs. International tourism receipts reached an estimated US$1.9 trillion in 2025. That scale matters because travel is global by design, and so is the payment complexity behind every booking.

You cannot buy a piece of technology, bolt it on, and move on. Travel payments need focus, investment, and specialist expertise.

The risk is built in

The defining feature of travel payments is what is called deferred delivery: travelers often pay months before they fly, check into a hotel, or take a tour.

That creates risk that many other sectors simply do not carry. A consumer may book a summer holiday in January, paying long before the service is delivered. In the meantime, an airline can fail, a route can be canceled, severe weather can disrupt plans, or geopolitical events can make an itinerary impossible.

For the merchant, its acquirer, and the wider payments industry, this is primarily a credit-risk problem. If a travel provider stops trading after receiving payment but before delivering the trip, customers will seek refunds or raise disputes. The merchant may no longer have the money, or may no longer exist.

That is why travel acquirers use reserves, delayed settlement, underwriting and close monitoring. Their exposure is not limited to what a travel merchant sold yesterday. It includes the value of all the journeys the merchant has already sold but has yet to deliver.

Travel payments are therefore not only about accepting transactions. They are about managing the risk created by future fulfillment.

Localization protects revenue

The first place travel brands often lose revenue is localization.

In the US, an airline can operate primarily in a domestic market and treat cross-border demand as an additional channel. For most other travel businesses, that assumption breaks down. Travelers routinely buy across borders, and they expect a payment experience that feels familiar.

If it does not, the customer either does not start the booking or abandons at checkout.

That starts with language and currency, but it goes further. It means offering the local payment methods people recognize and trust: cards where cards dominate, wallets where wallets are preferred, account-to-account payments where they are established, and installment options where high-ticket purchases make them attractive.

The commercial impact is clear. Nuvei research found that 92% of travelers expect pricing in their preferred currency, while 59% would abandon a booking if their preferred payment method were unavailable. It also found that 17% of travelers had experienced a failed payment attempt, and among those, 18% left the funnel rather than trying again.

Take a European airline selling into Thailand. If it offers only international credit cards, a customer may turn to a local online travel agency with a more familiar checkout. The airline may still sell the seat, but it loses the direct relationship, the margin, and the customer data.

Localization is not a customer-experience extra. It is a revenue-protection strategy.

Optimize for approval, not zero fraud

At checkout, travel payments become a balancing act. You need to approve good customers while stopping bad actors. Those goals pull against one another.

Travel bookings are often high value, cross-border, and made well ahead of fulfillment. A legitimate traveler might hit a card limit when buying a family holiday. An issuer may see an unusually large purchase from an unfamiliar merchant and decline it, even if the transaction is genuine.

The answer is not to eliminate every decline.The only way to do that is to stop selling.

The job is to recover the good ones. That means identifying soft declines, routing transactions to the best-suited acquirer, offering an alternative payment method, retrying intelligently, and enabling split payment where appropriate, for example two cards, or a card combined with loyalty points or an installment option.

This is funnel management. Every avoidable decline is a potential booking lost to a competitor.

Build selectively, partner deeply

Who does this well comes down to focus and scale.

Booking.com is a strong example. Its fintech business has grown to around 1,000 people, and its payments proposition manages transactions, local methods, fraud, cancellations, and chargebacks for travel partners. More than 70% of its revenue now flows through its merchant-of-record payments model.

Most travel companies cannot replicate that internally, nor should they try.

The right approach is to own the payments strategy while working with a partner whose core business is travel payment performance: local acquiring, alternative methods, payment orchestration, risk controls, fraud prevention, disputes, and conversion optimization.

Payments should be treated as a strategic capability, not a side project handed to a small team alongside other responsibilities.

AI will change the channel but not the direction

AI's immediate effect on travel will be to create another route to purchase. Large-language-model interfaces can help travelers research, compare, and move toward a booking, while the airline, hotel, or agency remains merchant of record.

Behind the scenes, machine learning is already improving fraud screening, reconciliation, dispute management, and checkout personalization. A strong decisioning engine can use signals including time to departure, IP location, preferred currency, past payment behavior, and risk indicators to shape the checkout in real time.

Fully autonomous booking will likely reach managed business travel first. Corporate travel already has policies, spending limits, approved suppliers, and designated payment credentials. It is structured and controlled,exactly the environment in which agents can operate safely.

Consumer holidays are different: emotional, high value, and full of exceptions. For now, most travelers will still want to make the final decisions themselves.

The card schemes will remain central to this transition. Visa, Mastercard, and Ant International are already working toward shared standards for verifying AI agents and enabling trusted agent-led transactions.

The direction of travel is clear. Customers want a checkout that feels local, familiar, and effortless. Merchants need one that protects conversion, cash flow, and risk.

The companies that treat payments as a growth discipline will capture that value. Those that treat it as an afterthought will keep losing customers at the last and most expensive step of the booking journey.