Travel payment processing: a complete guide for online travel agencies

Key takeaways

• Travel payment processing is more complex than most other industries. That’s because it involves cross-border payments, multi-currency payouts, a high fraud risk due to long fulfilment windows, and higher decline rates that cut straight into revenue.

• The right payment processing solution for travel should support multi-currency collection and payouts, competitive FX, local payment methods, fraud prevention, and clear reconciliation across bookings, commissions, and refunds.

• Airwallex’s global financial platform helps travel businesses collect payments in 180+ countries, pay suppliers through local rails in 150+ countries, and protect margins with interbank FX rates — all from one platform.

Global travel has bounced back stronger than ever. International tourism has now passed pre-pandemic levels. By 2028, travellers worldwide are expected to take 1.4 billion cross-border trips — a 17% increase from 2019. For online travel agencies (OTAs), tour operators, and destination management companies, that growth means more bookings, more revenue, and more chances to scale worldwide.

But there’s a catch. While cross-border travel is booming, many travel businesses still rely on fragmented payment systems. These systems can cost them money and bookings. According to research by Airwallex and Skift, more than two-thirds of travel finance executives say outdated or complicated payment systems directly affect organisational efficiency and profit margins. This guide explains what travel payment processing involves, the specific challenges travel businesses face, and how to choose a solution that can keep up with global growth.

What is travel payment processing?

Travel payment processing covers both sides of how money moves in a travel business. First, you collect money from travellers when they book. Then, you pay suppliers later, such as hotels, airlines, and tour operators. On the collection side, payment gateways capture the traveller’s card or payment details at checkout. On the payout side, travel businesses need to send funds to suppliers across many countries and currencies.

It also helps to know the difference between a payment gateway and a payment processor. A gateway is like the front door. It collects the customer’s payment details. A processor is like the engine room. It moves money from the customer’s account to yours. Many providers, including Airwallex, act as the gateway, processor, and acquirer in one. That simplifies your setup and cuts down the number of vendors you need to manage.

For a deeper look at how payment processing works across industries, we’ve got you covered.

Why is payment processing more complex for travel businesses?

Travel isn’t like standard eCommerce retail. Bookings are often high value. They’re often cross-border. They’re often made weeks or months before the trip. They also involve paying several parties, from hotels and airlines to local tour guides and transfer companies. Because of this, travel businesses face payment challenges that many off-the-shelf solutions weren’t built to handle:

• Transactions span dozens of currencies and countries

• Suppliers need to be paid in their local currencies, often before you’ve received full payment from the traveller

• The gap between booking and travel creates higher fraud and chargeback risk

• High-value cross-border card transactions face higher decline rates

According to the 2024 State of Payments in the Travel Industry report, 75% of travel executives earn more than a quarter of their revenue from cross-border payments. That’s a large slice of revenue going through payment systems that weren’t designed for this level of complexity.

Cross-border and multi-currency complexity

When a traveller in Germany books a tour in Thailand through your UK-based OTA, you’re dealing with at least three currencies before anyone’s even packed a bag. You may need to collect in euros, hold funds in pounds, and pay your Thai supplier in baht. Each conversion can reduce your margin.

Because of this, many travel businesses manage multiple banking relationships in different countries just to handle payouts. SWIFT transfers to international suppliers are slow, often taking 3–5 days. They’re also expensive. Cross-border fees can reach US$25–50 per transaction, plus poor exchange rates. If you’re processing thousands of supplier payments each month, those costs add up quickly.

Fraud risk and chargebacks unique to travel

Travel has one of the highest chargeback rates of any industry, and it’s easy to see why. When someone books a holiday six months ahead, a lot can change. Plans change. Circumstances change. In some cases, customers dispute valid charges after they’ve returned home. This is known as “friendly fraud”.

The long fulfilment window creates issues on both sides. Fraudsters have more time to use stolen cards before they’re caught. At the same time, real customers have more time to forget they booked or to change their minds. Add high transaction values (a family holiday can easily cost thousands) and card-not-present payments, and dispute rates can rise. Each chargeback doesn’t just cost the transaction amount. You may also pay chargeback fees, spend admin time, and face penalties from card networks if your chargeback ratio gets too high.

High payment decline rates and booking abandonment

Cross-border card payments have much higher decline rates than domestic ones. If a traveller’s card is issued in one country and your acquiring bank is in another, the issuing bank may see the payment as riskier. That can lead to more false declines. And each decline can mean a lost booking.

At the same time, checkout friction makes things worse. If a traveller from China can’t pay with Alipay, or a Dutch customer can’t see iDEAL, they’ll often abandon the booking. Also, poorly implemented 3D Secure authentication — while needed for fraud prevention — can add enough friction to put customers off. So, the key is to balance security with conversion.

Reconciliation across a fragmented payment chain

Travel reconciliation is well known for being messy. You need to match customer bookings with supplier payments. You also need to track commissions. On top of that, you may need to handle partial refunds, such as when someone cancels only the walking tour but keeps the hotel. And you need to manage all of this across several currencies and systems.

Because systems are often split, many OTAs end up with payment data in one place, booking data in another, and supplier payment records in a third. Finance teams then spend hours matching transactions by hand, chasing differences, and trying to understand cash flow. This isn’t just inefficient. It also increases the risk of errors and makes it harder to spot fraud or operational issues early.

Core features to look for in a travel payment processing solution

Now that we’ve covered the challenges, here’s what your payment stack needs to solve them. The right solution should handle multi-currency complexity, lower fraud and decline rates, and bring payment data together in one place.

Multi-currency accounts and local payment methods

Multi-currency accounts let you hold balances in the currencies you actually use. So, you can collect from a German customer in euros, keep those euros, and pay your European suppliers without converting to your home currency and then converting back again. This alone can save a lot of margin on each transaction.

Just as important, you should offer the payment methods your customers want to use. A traveller from China expects Alipay or WeChat Pay. Dutch customers look for iDEAL. Brazilian travellers often prefer Boleto. Also, digital wallets like Apple Pay and Google Pay are now expected in many places. Supporting local payment methods in your key source markets can cut decline rates and reduce booking abandonment.

Competitive FX rates and margin protection

FX costs can quietly reduce your margins, especially if you process a lot of cross-border payments. So, look for a provider with clear, competitive rates. Ideally, rates should be close to the interbank rate, instead of hiding mark-ups in the exchange rate.

It’s also useful to be able to lock in rates. If you collect payment today but won’t pay your supplier for 60 days, currency fluctuations can turn a profitable booking into a loss. Rate locking helps you protect your margin at the time of booking.

Fraud prevention and chargeback management

Since travel has higher fraud and chargeback rates, your payment solution needs strong protection built in. Look for machine learning-powered fraud detection that can spot suspicious patterns without blocking real customers. Also, well-implemented 3DS is essential. You want authentication that steps up when risk is high, but stays smooth for low-risk payments.

Chargeback tools matter too. If you can automatically gather evidence, respond fast, and track your chargeback ratio, you can stay in control before disputes become a bigger issue.

Reconciliation, reporting, and compliance

Your payment solution should bring your financial data together, not create another silo. Look for:

• Integration with your booking systems and CRM, so payment data flows automatically

• Connections to accounting platforms like Xero, QuickBooks, or NetSuite for data syncing

• Automated transaction matching to cut manual reconciliation work

• PCI DSS compliance built in, so you’re not handling card security yourself

• Support for PSD2 and Strong Customer Authentication (SCA) requirements in European markets

The goal is one source of truth for payment data. In one place, you should be able to see collections, payouts, commissions, and refunds across all currencies and markets.

How Airwallex helps travel businesses process payments globally

If you run a travel business that collects from customers worldwide and pays suppliers across borders, you need a platform built for that complexity. Airwallex brings collections, payouts, FX, and financial operations together in one place. So, you can focus on growing your business instead of managing payment infrastructure.

Accept payments and pay out suppliers from one platform

With Airwallex, you can:

• Collect payments from travellers in 180+ countries with 160+ local payment methods

• Hold balances in 20+ currencies with Global Accounts — with local bank details, so you can receive funds like a local

• Pay suppliers in 150+ countries, with over 90% of transfers going through local payment rails rather than SWIFT — so funds arrive faster and fees are lower

• Access interbank FX rates that can save up to 80% compared to traditional bank mark-ups

• Issue virtual Corporate Cards to manage supplier spend and employee expenses

More than 150,000 businesses trust Airwallex to move over US$150 billion each year. For travel businesses, that means you can collect a booking payment in one currency, hold it without forced conversion, and pay your hotel partner in their local currency — all from a single dashboard.

Embedded finance for travel platforms

For larger OTAs and travel platforms, Airwallex’s embedded payments APIs let you build branded financial products into your platform. You can offer suppliers faster payouts. You can give travellers stored-value accounts. You can also issue branded cards — all while earning revenue through FX mark-ups and card interchange fees.

This isn’t only about processing payments. It’s about using your payment infrastructure as a competitive advantage and a new revenue stream.

Ready to see how Airwallex can transform your travel payment processing? Sign up today or explore our travel solutions.

Frequently asked questions (FAQs)

What makes payment processing different for travel businesses compared to other industries?

Payment processing in travel is more complex than standard eCommerce. That’s because it involves high-value cross-border transactions, long gaps between booking and fulfilment, and payouts to many suppliers. It also comes with higher fraud and chargeback risk.

Unlike a typical retail purchase, where payment and delivery happen close together, a travel booking might be paid for months before the trip. It can also involve paying hotels, airlines, and tour operators in different countries and currencies.

Why are chargebacks so common in the travel industry?

Chargebacks are common in travel because there’s a long gap between when a customer pays and when they travel. That increases cancellations, disputes, and friendly fraud.

For example, a customer might book a trip six months ahead, forget about it, and dispute the charge when it appears on their statement. Or their situation changes, and they try to recover costs through a chargeback instead of following the cancellation policy. High transaction values and card-not-present transactions also increase the risk.

What local payment methods should travel businesses support?

Travel businesses should support the local payment methods that are most popular in their key source markets.

For Chinese travellers, that means Alipay and WeChat Pay. Dutch customers expect iDEAL. Brazilian bookings often come through Boleto. Also, digital wallets like Apple Pay and Google Pay are increasingly expected across all markets. Offering the right payment methods reduces abandonment and improves conversion rates.

How can travel companies reduce payment decline rates on cross-border bookings?

Travel companies can reduce decline rates by using local acquiring in key markets, supporting local payment methods, and optimising 3DS authentication to avoid extra friction.

It also helps to route transactions through the most effective payment path. When your acquiring bank is in the same country as the customer’s card issuer, the payment looks less risky and is more likely to be approved. Payment routing can automatically choose the best path for each transaction.