Travel payment processing: 2026 guide for travel businesses

Key Takeaways:

• Travel payment processing covers two flows: collecting payments from customers and paying suppliers across the globe — managing both well is what protects your margins.

• Cross-border payments bring real complexity for travel businesses, from foreign exchange (FX) volatility and chargebacks to local payment methods and multi-currency reconciliation.

• Airwallex gives OTAs and travel businesses a single platform to handle customer payments, supplier payouts, multi-currency accounts, and virtual cards — without the cost of traditional banking.

Travel payment processing is one of the most complex challenges in the industry. In 2025, an estimated 1.52 billion tourists travelled internationally — a new post-pandemic record — and every booking behind that number involves collecting funds from customers, settling across currencies, and paying suppliers around the world.¹

The risks are real. Airwallex and Skift's 2024 State of Payments in the Travel Industry surveyed 473 travel executives globally and found that nearly two-thirds reported outdated or complex payment systems were directly hurting their efficiency and profit margins.

This guide covers how travel payment processing works, the challenges unique to the industry, and the features — from virtual cards to Buy Now, Pay Later — that are reshaping how travel businesses move money.

What is travel payment processing?

Travel payment processing covers two connected flows. The first is collecting payments from customers when they book a flight, hotel, tour, or package. The second is paying the suppliers and vendors — airlines, hotels, car rental companies, tour operators — who deliver those services.

Both flows run through payment gateways: secure technology that accepts customer payments via cards, digital wallets, and other cashless methods. Payment gateways power the checkout pages you see on OTA websites and booking platforms.

Payment gateway vs. payment processor

These two terms are often used interchangeably, but they do different jobs:

• A payment gateway collects your customer's payment details at checkout and passes them on securely.

• A payment processor takes those details and moves the money — linking the customer's bank to your merchant account.

For a full breakdown of how the two work together, see our guide to payment gateways vs. payment processors.

Some providers handle both roles, plus a third: the acquirer. An acquirer manages your merchant account, handles transaction approvals and settlement with banks, and takes on the risk of chargebacks and fraud.

Airwallex acts as a gateway, processor, and acquirer all in one — which means you can manage your entire payment flow from a single platform.

The double-loop payment flow

OTAs and travel businesses face a payment challenge that most other industries don't: the double-loop flow.

When a customer books a trip, they pay the OTA (loop one). The OTA must then pay the relevant suppliers — hotels, airlines, tour operators — on the other side of the transaction (loop two). This two-sided flow becomes difficult to manage at scale, especially when it involves multiple currencies, high transaction volumes, and time-sensitive supplier relationships.

Older systems like bank transfers and manual invoicing slow this process down and create reconciliation headaches. Modern travel payment platforms are designed to handle both loops within a single system.

Why travel payments are considered high-risk

Payment processors often classify travel businesses as high-risk — and for good reason. Several factors set the industry apart:

• Delayed delivery: Customers pay months before they travel. The gap between payment and fulfilment creates chargeback exposure.

• High transaction values: A single booking can run into thousands of dollars, making disputes more costly to resolve.

• Seasonal volume swings: Processing volumes spike during peak seasons, which can trigger scrutiny from payment providers.

• Cross-border complexity: International transactions introduce FX risk, fraud risk, and regulatory requirements across multiple jurisdictions.

Understanding these characteristics helps you ask the right questions when choosing a travel payment processing provider.

How does travel payment processing work?

When a customer books a flight, hotel, or tour package, the transaction follows a clear sequence:

• The customer enters their payment details at checkout

• The payment gateway encrypts and transmits those details to the payment processor

• The processor forwards the request to the customer's issuing bank for authorisation

• The bank approves or declines the transaction

• The processor sends the result back through the gateway

• The OTA receives the funds and confirms the booking to the customer

That covers the first loop. The second loop — paying suppliers — runs parallel to this. Once a booking is confirmed, the OTA must pay the hotel, airline, or tour operator, often in a different currency and through a different payment rail.

Managing both loops efficiently, at scale, and across multiple currencies is what separates a strong payment operation from a costly one.

The challenges travel businesses face

Travel payment processing is more complex than most other industries. According to Airwallex and Skift's 2024 State of Payments in the Travel Industry — which surveyed 473 travel executives across seven global markets — the most common challenges include:

• FX volatility: 67% of executives said cross-border payments have become more complex due to foreign exchange rate fluctuations

• Supplier payment friction: Paying international suppliers frequently — in multiple currencies and across different payment rails — was among the top operational pain points cited by travel executives

• Cart abandonment: 48% reported issues with customers abandoning bookings when their preferred payment method is not available at checkout

• Reconciliation complexity: 70% said they lose significant time reconciling financial data across countries and markets

• Fraud risk: 52% rated fraud detection as one of the most challenging issues with their existing payment systems

These are not edge cases. They are structural features of the travel industry — and choosing the right payment processor is one of the most effective ways to address them.

How is travel payment processing evolving?

The way travellers pay has changed significantly, and it continues to shift. Credit and debit cards remain the most widely used payment method for travel bookings, but they are no longer the whole picture.

Digital wallets and local payment methods

Mobile wallets are gaining ground fast, particularly in Asia. WeChat Pay and Alipay have become the dominant cashless payment tools in China, and both are increasingly accepted by merchants across Singapore and Southeast Asia as Chinese tourist numbers recover. For OTAs and travel businesses serving Asian markets, supporting these wallets at checkout is essential.

Beyond China, the picture varies by market. Each region has its preferred local payment methods, from PayNow in Singapore to bank transfers in parts of Europe.

Airwallex and Skift's 2024 survey found that 32% of travel customers regularly use local payment methods. Offering only cards at checkout means leaving a significant share of bookings on the table.

Buy Now, Pay Later

Buy Now, Pay Later (BNPL) is becoming a meaningful payment option in travel, particularly for higher-value bookings. It allows customers to spread the cost of a trip across installments — without going through a formal credit application.

For travel businesses selling packages, tours, or multi-destination itineraries, BNPL can reduce cart abandonment by making large purchases feel more manageable.

BNPL adoption is growing fastest among younger travellers and in markets where instalment payments are culturally familiar. If your checkout does not offer a BNPL option, you may be losing bookings to competitors who do.

Virtual cards for supplier payments

Virtual cards (VCNs) are reshaping how OTAs pay their suppliers. Instead of relying on bank transfers or shared corporate cards, travel businesses can generate a unique virtual card for each supplier payment. Each card is tied to a specific booking or transaction, which makes reconciliation faster and fraud risk lower.

For OTAs managing payments to dozens of hotels, airlines, and tour operators simultaneously, virtual cards also create a new revenue opportunity: interchange rebates earned on each card transaction. This means the act of paying suppliers can generate income, rather than simply being a cost centre.

Airwallex allows travel businesses to instantly issue multi-currency virtual cards for supplier payments — with full spending controls, real-time tracking, and automatic reconciliation built in.

The shift towards unified platforms

The direction of travel is clear: away from fragmented, multi-vendor payment stacks and towards unified platforms that handle customer payments, supplier payouts, FX management, and reconciliation in one place.

Travel businesses that consolidate their payment infrastructure reduce costs, speed up settlements, and free their finance teams from manual reconciliation work.

Core features for an online travel payment processing solution

Not every payment platform is built for the complexity of travel. When evaluating providers, these are the features that matter most.

Multi-currency accounts

Travel businesses collect revenue in multiple currencies and pay suppliers in multiple currencies. A multi-currency account lets you hold foreign currencies without converting them immediately — which means you avoid unnecessary FX conversion fees and protect yourself from rate fluctuations between collection and payout.

Look for a provider that offers global accounts with local bank details in key markets, so you can receive funds like a local business — without setting up separate legal entities.

FX management and rate protection

Foreign exchange costs are one of the biggest margin drains in travel. A good payment platform gives you access to competitive, transparent FX rates, and ideally the ability to lock in rates in advance to hedge against volatility.

Avoid providers who bundle hidden FX markups into their transfer fees. Always ask for the all-in rate before committing.

Fraud prevention and chargeback management

Travel is a high-risk industry for fraud and disputes. Your payment platform should include built-in fraud detection that analyses transactions in real time, not just a basic filter that flags obvious anomalies.

Look for a customisable risk engine that lets you set your own thresholds. You want to block fraudulent transactions without rejecting legitimate bookings from genuine customers in unfamiliar locations.

Virtual cards for supplier payments

As covered in the previous section, virtual cards are increasingly central to how OTAs manage B2B supplier payments. The ability to issue single-use or multi-use virtual cards — tied to specific bookings, with spending limits and real-time tracking — reduces fraud exposure and speeds up reconciliation significantly.

Airwallex's Corporate Cards can be issued instantly in multiple currencies, with custom controls for each card.

Local payment methods at checkout

Offering only credit cards at checkout is not enough. Your platform should support a wide range of local payment methods — from digital wallets like Alipay and WeChat Pay in China, to PayNow in Singapore — so customers can pay the way they prefer.

The broader your payment method coverage, the lower your cart abandonment rate.

Supplier and vendor payment reconciliation

Reconciling bookings, payments, commissions, and refunds across multiple systems is one of the most time-consuming tasks in travel finance. A strong payment platform automates data entry, matches transactions to bookings, and flags discrepancies — so your team spends less time on manual reconciliation and more time on growth.

Integration with accounting software like Xero is a practical requirement, not a nice-to-have.

Simple integration and automation

Your payment platform should integrate cleanly with your existing booking systems, CRM tools, and accounting software. Lengthy or complex integrations slow you down and increase implementation risk.

Look for a provider with flexible API options, no-code plugins for common platforms, and a track record of working with travel businesses at scale.

Questions to ask a travel payment processing provider

Choosing the right provider is one of the most consequential decisions a travel business makes. Use these questions to cut through sales pitches and evaluate what a platform actually delivers.

Do you offer multi-currency payment processing?

You need to collect payments from customers in their local currency and pay suppliers in theirs. Confirm the provider supports the specific currencies and markets you operate in — not just a headline number.

How do you manage FX rates? What is the all-in cost?

Ask for the actual rate applied to a transaction, including any markup on top of the interbank rate. Some providers advertise low transfer fees but apply a significant FX margin that is never clearly disclosed.

What local payment methods do you support?

Get a specific list of the payment methods available in your key markets. If you serve customers in China, Singapore, or across Southeast Asia, confirm support for wallets like Alipay, WeChat Pay, and PayNow.

What fraud prevention and chargeback tools are included?

Ask whether fraud detection is built in or requires an add-on. Find out whether you can customise risk thresholds, and what the process is for disputing chargebacks.

How does reconciliation work across bookings and supplier payments?

Ask how the platform handles matching customer payments to supplier payouts across multiple currencies. Find out which accounting systems it integrates with and whether reconciliation is automated or manual.

What is the integration process with our existing systems?

Ask how long a typical integration takes, what technical resources are required, and whether there are pre-built plugins for the booking systems and eCommerce platforms you already use.

Can we manage all payment processes from one interface?

A fragmented stack — separate tools for customer payments, supplier payouts, FX, and expense management — creates cost and complexity. Confirm whether the platform handles all of these in a single dashboard.

Do you offer virtual cards for supplier payments?

Virtual cards are becoming standard for B2B travel payments. Ask whether the platform supports instant card issuance, multi-currency spending, and per-transaction controls — not just employee expense cards.

What are your fees? Are there any hidden costs?

Ask for a full fee schedule covering transaction fees, monthly fees, FX markups, chargeback fees, and any costs for additional payment methods or currencies.

What ongoing support do you provide?

Travel operates across time zones. Ask what support channels are available, what response times look like, and whether you will have a dedicated account manager.

How Airwallex can help your travel business scale

Travel payment processing requires a platform that handles both sides of the equation — collecting from customers and paying suppliers — without the cost and friction of traditional banking. Airwallex is built to do both, within a single platform.

Airwallex acts as a gateway, processor, and acquirer all in one. That means you manage customer payments, supplier payouts, FX, and reconciliation from one dashboard — without stitching together multiple vendors or juggling separate banking relationships across markets.

Here’s what you get with Airwallex:

Accept payments from customers globally

With Airwallex Payments, you can accept payments from customers in 180+ countries via 160+ local payment methods — from major card networks to Alipay, WeChat Pay, and PayNow. Customers see prices in their local currency at checkout, which reduces friction and improves conversion.

You do not need to set up local legal entities to collect in local currencies. Airwallex gives you local bank details in 70+ countries through Global Accounts, so you receive funds like a local business from day one.

Pay suppliers faster and at lower cost

Airwallex's global network of local payment rails means you can pay overseas suppliers in their local currency, without routing through SWIFT. You can transfer to 120+ countries via local rails, with $0 SWIFT fees and faster settlement. 93% of transactions made via Airwallex arrive on the same day.

For suppliers that accept card payments, Airwallex lets you instantly issue multi-currency virtual Corporate Cards — each tied to a specific booking or vendor, with custom spending limits and real-time tracking. This makes reconciliation faster, reduces fraud exposure, and can generate interchange rebates on every transaction you make.

Protect your margins on FX

Every cross-border transaction carries FX risk. Airwallex gives you access to competitive exchange rates from 0.4% to 0.6% above interbank, so you’re not paying a hidden markup on every conversion. You can also hold funds in multiple currencies and convert only when you choose to, which lets you manage timing risk on volatile currency pairs.

Simplify reconciliation

Airwallex integrates with Xero, so your payment data flows directly into your accounting system without manual data entry. Multi-currency balances, supplier payments, card transactions, and customer receipts are all visible in one place — which gives your finance team a clear, real-time picture of your cash position.

Case study: How EU Holidays boosted profit margins with Airwallex

Singapore travel agency EU Holidays grew from a team of 5 to 150+ employees across three subsidiary offices. As they expanded their destination portfolio, the cost of paying international suppliers through traditional banks began cutting into their margins — with high SWIFT fees and unfavourable FX rates on every transaction.

After switching to Airwallex, EU Holidays increased their profit margins by 30 points. By paying overseas suppliers in local currencies via Airwallex's local payment rails, they eliminated SWIFT fees entirely. Here’s how they did it:

Frequently asked questions (FAQs)

What is travel payment processing?

Travel payment processing covers two connected flows: collecting payments from customers when they book flights, hotels, tours, or packages, and paying the suppliers who deliver those services. It runs through payment gateways and processors that securely transmit, authorise, and settle funds across banks and currencies. For travel businesses operating across borders, it also involves managing FX, local payment methods, and multi-currency reconciliation.

Why is travel payment processing considered high risk?

Payment processors classify travel as high risk because of the gap between when a customer pays and when the service is delivered — often months apart. This creates chargeback exposure if trips are cancelled, changed, or do not meet expectations. High average transaction values, seasonal volume swings, and the cross-border nature of most travel payments add further complexity and fraud risk.

What payment methods should a travel business support?

At a minimum, travel businesses should support major credit and debit cards, digital wallets such as Apple Pay and Google Pay, and the local payment methods most common in their key markets. In Asia, this includes Alipay, WeChat Pay, and PayNow in Singapore. Buy Now, Pay Later options are also growing in popularity for higher-value bookings, particularly among younger travellers.

What are virtual cards and how do they help travel businesses?

Virtual cards are digitally generated payment cards — each with a unique card number — that travel businesses use to pay suppliers. Each card can be tied to a specific booking or vendor, which makes reconciliation faster and reduces fraud risk compared to shared corporate cards. For OTAs managing payments to multiple hotels, airlines, and tour operators, virtual cards also generate interchange rebates on every transaction, turning supplier payments into a modest revenue stream.

How can travel businesses reduce chargebacks?

The most effective approach combines clear cancellation and refund policies, real-time fraud detection, and thorough transaction records. Requiring card verification values (CVVs) and using 3D Secure authentication for high-risk transactions also helps. Airwallex's customisable risk engine lets travel businesses set their own fraud thresholds — blocking suspicious transactions without rejecting legitimate bookings. Fast refund processing reduces the likelihood of customers initiating disputes through their bank.

What should I look for in a travel payment processing provider?

Look for a provider that handles both customer payments and supplier payouts within a single platform, supports multi-currency accounts and local payment methods in your key markets, and offers transparent FX rates with no hidden markups. Built-in fraud prevention, virtual card issuance, and integration with accounting software like Xero are also important for travel businesses operating at scale. The fewer vendors you need to manage your payment stack, the lower your operational cost and reconciliation burden.

Sources:

1. https://www.untourism.int/news/international-tourist-arrivals-up-4-in-2025-reflecting-strong-travel-demand-around-the-world

This publication does not constitute legal, tax, or professional advice from Airwallex, nor does it substitute seeking such advice, and makes no express or implied representations / warranties / guarantees regarding content accuracy, completeness, or currency. If you would like to request an update, feel free to contact us at [[email protected]]. Airwallex (Singapore) Pte. Ltd. (201626561Z) is licensed as a Major Payment Institution and regulated by the Monetary Authority of Singapore.