Payments keep the travel industry moving, but recent research reveals that nearly two-thirds of travel businesses are losing valuable revenue because of payment inefficiencies.
Whether you’re an online travel agency (OTA), a travel experience platform, or one of many related businesses in an increasingly diverse travel and tourism market, you must optimize your payment systems and practices to protect and grow revenue.
In this article, we’ll explore five payment strategies that can help travel businesses enhance customer experience, reduce costs, and drive more revenue.
1. Think global, act local
Although travel aims to widen horizons and broaden minds, the cliché about acting locally is particularly apt for payments.
For brands serving global audiences, localization must be at the core of their payment strategy. Localization means understanding different cultural, economic, and technological needs and aligning payments to suit specific preferences.
There are five main requirements for merchants to consider when localizing their payment experience:
- Use the customer’s local language at checkout: Ensure a seamless experience by translating all checkout elements, including error messages and confirmation pages.
- Display prices in the local currency: Avoid confusion and increase conversion rates by showing accurate, real-time currency conversions.
- Offer relevant local payment methods: Provide the payment options your customers trust and prefer, from regional credit cards to alternative payment solutions.
- Comply with local regulations and tax requirements: Adapt to country-specific laws, such as data privacy (GDPR, CCPA), security mandates (PSD2, 3D Secure), and local tax obligations.
- Understand cultural nuances: Tailor messaging, imagery, and UX elements to align with local expectations and buying behaviors.
When travel companies fail to adapt their services to local markets, they risk losing customers and revenue. For example, a German traveler looking to book a tour in Japan may choose a competitor if they don't see prices in euros or familiar payment options. This lack of localization can create uncertainty and distrust, causing unnecessary friction in the booking process.
Offering relevant payment methods is critical to the localization process. Research shows that 76% of consumers will abandon a digital purchase if their preferred payment method isn’t available.
However, it’s essential to be strategic. Expanding into a new market might make supporting every alternative payment method tempting, but that’s neither practical nor necessary. Too many options can overwhelm customers, and managing them adds significant complexity and costs. The goal isn’t to offer every payment method—it’s to provide the most relevant ones.
2. Offer installment payments
Traditionally, many travel operators either required full payment upfront or allowed customers to pay a deposit and settle the balance later. However, buying behavior has changed over the last decade, and now customers demand more flexibility.
This has led to more travel brands offering a form of Buy Now, Pay Later (BNPL) at the checkout, allowing travelers to spread the cost over multiple installments, making high-ticket bookings more accessible. A survey found that 68% of consumers would spend more on summer travel if BNPL were available.
Major airlines have adopted flexible payment options, including British Airways, Delta Airlines, and United Airlines, as well as online travel agencies such as Booking.com.
However, offering this payment option can be challenging because it comes at a cost that can reduce travel companies' sometimes tight margins. BNPL options can charge merchants a transaction fee of a few percent plus a flat fee of per transaction.
As a result, more travel brands offer installment payments in-house using cards, much like a subscription business. This approach helps reduce fees associated with third-party installment providers but comes with challenges. Building these payment flows is complex, and any breakage can create significant operational headaches.
At Primer, we support both models, recognizing that the best approach depends on a company’s strategy, margins, and operational capabilities. As travel brands navigate the trade-off between cost savings and complexity, it will be interesting to see whether more businesses opt to bring installment payments in-house or continue relying on third-party providers for simplicity and scale.
3. Adopt a multi-processor strategy
The travel industry is inherently high-risk, and depending on a single payment processor only increases that risk.
A technical outage, an unexpected policy change, or even being reclassified as high-risk can instantly cut off a business’s ability to process payments. For travel firms—where margins are tight and cash flow is critical—this isn’t just a setback; it’s a potential existential threat.
Diversifying payment processors protects businesses from these disruptions. It ensures continuity during peak booking periods, reduces the risk of declined transactions, and provides a seamless experience for customers, even in the face of unforeseen challenges.
Beyond resilience, a multi-processor payment strategy gives merchants more control over costs. It enables them to negotiate better rates, minimize unnecessary cross-border and interchange fees, and intelligently route transactions based on performance.
Of course, implementing this strategy isn’t without challenges. Adding new processors, maintaining integrations, and building smart transaction-routing logic can be complex and resource-intensive. That’s why leading travel brands like GetYourGuide, HappyEasyGo, Pelago, and loveholidays are partnering with Primer. With Primer, they can unlock these capabilities without the heavy lift—reducing costs, safeguarding revenue, and ensuring business continuity with minimal effort.
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4. Fight payment fraud with the right tools
Fraud is a growing concern across the payments industry, and chargeback fraud is particularly challenging for travel firms.
Chargebacks are designed to protect consumers, allowing them to dispute transactions and receive refunds in cases of fraud or service issues. However, the system is frequently exploited.
The travel industry accounted for roughly 1 in 8 chargebacks issued in 2019, and post-pandemic, the number of fraudulent chargeback issuances rose by 41% across all merchant verticals.
Travel businesses, acting as intermediaries between customers and service providers like airlines or car rental companies, are especially vulnerable. The complexity of multi-party transactions can create gaps that fraudsters manipulate, making it harder for merchants to contest illegitimate disputes.
To combat chargeback fraud, travel firms should use countermeasures such as 3D Secure and other digital tools for pre- and post-authentication checks. Additionally, clearer transaction descriptors, robust refund policies, and real-time dispute management solutions can help prevent friendly fraud and improve chargeback win rates.
5. Build partnerships and innovate with payments
Integrated and embedded solutions are reshaping the travel industry. They enable seamless, bundled experiences that enhance customer satisfaction and drive revenue.
For instance, a traveler booking a flight could be offered a rental car from a preferred provider within the same checkout flow—creating a frictionless, one-stop experience.
However, powering these interactions isn’t simple. It requires real-time data exchange between multiple providers, and any communication breakdown can lead to failed transactions, booking errors, or frustrated customers.
At Primer, our Vault App simplifies this complexity. It enables secure and seamless sharing of payment data between two parties—whether that’s forwarding PCI-sensitive information to a compliant third party (such as a car rental company when booking a holiday) or allowing PCI DSS Level 1 merchants to securely store card details on their side. This ensures embedded payment flows work smoothly, reduces operational headaches, and makes these integrations far easier to manage.
Primer for travel firms
The travel industry is rapidly evolving, and payments are at the heart of that transformation. Whether it’s localizing payment experiences, offering flexible financing, diversifying processor connections, mitigating fraud, or embedding payments into seamless customer journeys, the ability to optimize payments is becoming a key competitive advantage.
Yet, executing these strategies at scale is no small feat. The complexity of integrating multiple providers, maintaining security and compliance, and ensuring a frictionless checkout experience can overwhelm even the most established travel brands.
As the industry evolves, travel businesses that take a strategic approach to payments—focusing on flexibility, coverage, resilience, and customer experience—will be better positioned to drive growth, reduce risk, and stay ahead in an increasingly competitive market.
Find out how Primer can improve your travel business and maximize your revenue. Book a call with our payment experts.
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