The travel industry is at a turning point, and payments are taking center stage. While the world of digital-native companies has made payments almost invisible—quick, seamless, and effortless—the travel sector is still playing catch-up. But the stakes have never been higher. As travel demand surges globally, improving payment experiences could be the key to unlocking customer satisfaction and profitability.
New research shows that 75% of senior travel payment leaders have made improving the payment experience their top priority for 2025. Companies are increasing their investments in payment capabilities by an average of 12%, aiming to deliver a smoother, more personalized payment journey. However, the industry has a long way to go: companies gave themselves an average score of just 2.7 out of 5 for delivering an omnichannel payment experience, with only 4% feeling they’ve hit the mark.
Travelers want the freedom to pay how and where they want—whether it's with traditional credit cards, mobile wallets, or emerging localized methods. But for over half of travel companies, keeping up with this rapid evolution remains a challenge, due to high costs, technical complexities, and gaps in understanding what payment options travelers prefer.
For airlines, the story is even more nuanced. The International Air Transport Association (IATA) projects a net profit margin of 3.1% for airlines in 2024, with record highs in passenger numbers, revenues, and expenses. Despite the optimism, profit margins remain slim, and the cost of money surpasses returns on capital investment.
Jack Zhang, Co-founder and CEO of Airwallex, sums up the challenge:
“As global travel continues to boom, travel companies increasingly rely on quick and seamless cross-border payments to surpass customer expectations at every touchpoint. However, slow and outdated payment processes are increasing the cost of moving money internationally, which is eating into their profits – modest at the best of times.”
Modernizing payment systems isn’t just about convenience—it’s a matter of survival. Airlines are focusing on simplifying payment complexities, whether it's streamlining reconciliation processes, integrating multiple payment options into a single solution, or leveraging advanced fraud protection.
Credit and debit cards still dominate airline retail transactions, accounting for 70% of payments, but come with hefty fees. In North America and Europe, credit card fees range from 2% to 3.9%, eating into already-thin margins. Innovative payment solutions and smarter financial operations, such as optimized foreign exchange rates or reduced chargebacks, could provide a critical edge.
The travel industry’s resilience lies in focusing on what it can control—and payments are a prime example. Whether it’s reducing credit card fees, integrating localized payment methods, or partnering with FinTech innovators, the companies that invest in modernizing their payment systems will be best positioned to thrive.
As the industry moves into 2025, the message is clear: frictionless, cost-effective payment solutions are no longer a luxury—they’re a necessity. With global travel reaching new heights, the companies that get payments right will set the standard for the next era of travel.