• Ian Clowes, Co-founder and Chairman at Swiipr


• 19.09.2025 01:30 pm
#Airlines #PaymentSystems

The global travel compensation market is booming. Spurred on by the growth of social media and the rise of airline claims companies, passengers affected by travel disruptions have become increasingly confident in exercising their consumer rights. Whereas in the past, many travellers failed to claim compensation, today airlines lose an estimated $2 billion per month as a result of flight disruptions. Indeed, data from January to May 2025, supplied by the European Commission, revealed that delays and cancellations cost carriers a huge €8.1 billion in total during that period. 

Against the backdrop of this growing compensation market (set to reach $20bn in value by 2030, according to data from Reports N Markets), airlines have two choices: sink or swim. Or, perhaps more aptly: fly, or end up grounded on the runway. 

The good news is that many of the disruption-related issues faced by carriers could be soothed with up-to-date payments solutions and data tools. The large majority of airlines currently rely on outdated, inefficient payment systems like bank transfers to process compensation and other disruption-related funds - ignoring the vast potential and retention opportunities of modern payments technology.  

Bank transfers can take days, weeks, or even months to process and have a patchy success rate due to the vast global spread travellers and local banking rules – draining airline resources and leaving passengers frustrated and unhappy. With such a wide range of seamless, automated payment solutions out there, these outmoded methods may seem like an odd choice. Hampered by inertia, airlines use bank transfers not because they are passenger-friendly or efficient, but because that’s how they’ve always done things. Indeed, bank transfers might have been sufficient at a time when very few customers chose to claim compensation. Now however, airlines need a payment system that allows them to distribute funds en masse, globally, and automatically – without risk. 

Along with bank transfers, old-fashioned paper vouchers are often used by airlines to provide passengers with money for food and drink while they wait to complete their journey. The fact that these must be distributed manually can cause extra work for airline staff, are vulnerable to fraud ,and cause frustration for passengers. Meanwhile, it’s rarely possible to split paper vouchers across multiple purchases, while they are often restricted to a particular shop or restaurant – both of which factors limit the passenger’s choice of where to spend their funds and reduce customer satisfaction. 

Modern payment solutions can do little to reduce flight delays. What they can do is cut the unnecessary costs associated with flight disruptions by streamlining the compensation process and greatly enhancing customer experiences. For example, drawing on contactless and mobile payment technology, airlines can digitise compensations payments so that they go straight to a passenger’s phone or a pre-paid card. Funds are distributed automatically – freeing up staff for other duties – and the mobile and physical cards can then be used like any other payment card – satisfying customer expectations for instant, digital payments. No more cumbersome, manual compensation processes. No more frustrated passengers or lost customer revenue. 

In short Airlines are realising in the new digital world, it’s better to be predictive rather than reactive in paying out compensation, both for customer satisfaction and long-term shareholder value.