Payments that work can still cost you revenue

Your payment dashboard is good at telling you what happened. Bookings cleared, settlements landed, the month closed. It’s far less helpful on what didn’t happen: the genuine traveller whose card was declined, or the slice of a successful sale that an FX markup quietly took. That gap is where international travel revenue leaks.

Hotels, airlines, OTAs, and tour operators all run differently, but they need the same thing from payments: legitimate customers should be able to complete their bookings, and the business should keep as much of each sale as possible.

Where international revenue leaks

In an Airwallex and Skift survey of 473 travel executives, 75% said more than one-quarter of their company’s revenue came from cross-border customer payments. Nearly two-thirds said problems with their payment systems were hurting profit margins. When that much revenue crosses a border, a few percentage points of declined volume or FX cost can noticeably change profit.

The friction shows up at specific moments in the journey.

At authorisation

Picture a family in Melbourne booking a week at a hotel in Lisbon. The card is valid and the funds are there. But the issuer sees a euro charge from a merchant it doesn’t recognise, in a country the cardholder has never spent in, and declines it. Issuers’ fraud systems can treat cross-border payments as unfamiliar, so this can happen even when the customer and the payment are fully legitimate.

The family retries, phones their bank, or books somewhere else. Your dashboard logs one declined payment. The hotel has lost a week-long stay from a customer who was ready to pay.

At conversion

A booking can succeed and still leave money on the table. When a foreign-currency payment is converted automatically at settlement, the provider’s FX markup comes out of what you keep. Depending on the provider and currency corridor, that can add around 2–3% in FX costs. At that rate, every US$1 million of foreign-currency payments converted automatically costs US$20,000–30,000. Because the markup sits inside the exchange rate, no line on your statement flags it.

At market entry

Each new market comes with its own payment methods, currencies, acquiring requirements, and compliance rules. Your marketing can bring travellers to checkout in a new country, but if checkout can’t take the payment method they use at home, that spend goes to waste. If your current setup can’t support what customers there expect, launching takes longer and needs more operational work.

What “it’s working” leaves out

Ask a Head of Payments or CFO how the payment stack is performing, and you’ll probably hear that it’s working. Bookings clear, settlements arrive, and the books close at month-end.

Every part of that answer is accurate – but this answer only comes from reports built to track payments that happened. A decline appears as a declined card, with no record of the booking that didn’t follow. FX cost sits inside the exchange rate instead of appearing as a separate fee. A slow market launch looks like an ordinary project timeline.

For an international travel business, a more useful measure is how much of each booking’s value reaches the business. Infrastructure that already works can stay in place while you find where declines, FX costs, and launch delays occur.

How to keep more of your international revenue

Reduce avoidable declines

A handful of tools target the declines that happen when a genuine payment looks unfamiliar:

• Local acquiring: Processes the payment through an acquirer in the customer’s region, so the issuer sees something closer to a domestic transaction.

• Adaptive routing: Sends each payment down the path most likely to be approved.

• Retries: Resubmit a declined payment so it gets a second chance.

• 3D Secure (3DS) logic: Adds a verification step where it helps an issuer approve a payment it might otherwise decline.

• Network tokenization: Replaces the raw card number with a token issued by the card network.

In some card cohorts, network tokenization can lift authorisation rates by up to 15 percentage points versus raw card credentials. Actual results depend on the issuer and card mix.

Settle in the customer’s currency

Receive and hold funds in the currency the customer paid in, then pay overseas suppliers in their local currency where possible. If your customers pay in euros and your Portuguese suppliers are paid in euros, the money never passes through an exchange. That cuts unnecessary conversions and makes international cash flow easier to manage.

EU Holidays increased its profit margins by 30 percentage points after using Airwallex’s FX capabilities and paying overseas suppliers in local currencies through local payment rails.

Enter new markets through one integration

Accept payments in 130+ currencies and offer 160+ local payment methods through a single integration, subject to merchant entity and market availability. You don’t need to build a separate connection for each market or payment method, so a new launch starts from what you already have.

Minor Hotels projects more than US$7.2 million in annual savings and expects payment success rates to rise by close to 30% after consolidating its global acquiring, settlement, and treasury infrastructure with Airwallex.

Where to start

Ask your provider for two figures: your authorisation rate for cross-border card transactions, and the share of foreign-currency payment volume automatically converted at settlement. Use the latter to quantify your FX-exposed volume, then apply your provider’s actual FX markup to estimate the associated cost. Keep the authorisation rate, measured on comparable traffic, as the baseline for evaluating any changes you make.

Both numbers are usually quick to request, and they turn a vague sense that payments could perform better into something you can compare. They also show where to look first. If the authorisation rate is low, approvals are the bigger opportunity. If a large share of volume converts automatically, settlement is. Either way, you’ll know which part of the journey to fix before you commit to a project.

If you’d like help reading the results against your own setup, our team can walk you through them.

See what a better payment journey could look like with Airwallex. Learn more.