Navigating Payment Challenges In Travel: The Road Ahead

Payments
21.07.2025 01:30 pm

As the global travel industry continues to rebound and evolve in 2025, payment remains one of the most critical yet often overlooked areas of transformation. From shifting consumer expectations to increasing operational complexity, how travel companies handle payments is quickly becoming a major competitive differentiator.

Today’s traveller expects the same speed, simplicity, and convenience they experience when shopping online, particularly younger generations. However, FinMont’s recent survey of European travellers* reveals that the booking and payment process is often too long, confusing, or simply not mobile-optimised.

One striking finding was that nearly 10% of travellers under 34 abandon bookings when mobile wallets like Apple Pay or Google Pay aren’t available. The share of travel transactions using mobile wallets jumped by 30% in 2024, with mobile bookings accounting for 37% of total sales**, so this dropout rate represents a significant loss in revenue and points to an urgent need for modernisation. Mobile wallets are now mainstream in the travel industry, with 74% of travellers relying on digital wallets during trips, rising to 82% among millennials and affluent travellers. ***

While other industries have embraced fast, secure checkout systems, many travel merchants still rely on legacy infrastructure. The result is higher cart abandonment rates, increased friction at checkout, and ultimately, a less satisfying customer experience.

Consumers today aren’t just looking for convenience; they want a seamless experience they can control every aspect of, including how and when they pay. The rise of Buy Now, Pay Later (BNPL) solutions is an example of consumer expectations when it comes to flexible payments. FinMont’s research shows that over 10% of travellers would increase their spending on trips if offered payment instalments through providers like Klarna.

At the same time, loyalty rewards are playing an increasingly important role. About 14% of travellers consistently rebook with providers offering appealing rewards, suggesting that payments, when tied to benefits, can also influence long-term customer retention.

Together, these trends point to an opportunity: travel businesses can boost both revenue and loyalty by offering flexible, consumer-friendly payment choices.

It’s not just the front-end experience that needs work. Behind the scenes, payment inefficiencies take a heavy toll. According to a recent report by Edgar, Dunn & Company, airline payments alone represent a $20.3 billion cost annually, accounting for 2.2% of all airline revenue and a staggering 78% of the industry’s net profit.

These costs stem not just from processing fees, but also from the complexity of managing multiple systems, currencies, and settlement partners. In fact, 41% of travel companies report that managing payments is their single biggest source of financial stress, according to IATA.

This fragmentation doesn’t just create operational drag; it also limits visibility into payment data, makes it harder to prevent fraud, and drives up overall costs.

Fortunately, technology is catching up. Advanced payment orchestration platforms like FinMont are helping travel companies connect distribution channels with payments, fraud prevention, FX, and back-office systems in one unified infrastructure. By leveraging AI to determine the optimal routing for each transaction, based on market, cost, and risk, travel merchants can reduce fees, increase acceptance rates, and gain full transparency into the payment lifecycle.

This isn’t just about saving money. It’s about delivering a faster, smoother booking experience, building trust with consumers, and positioning for scalable growth in an increasingly digital marketplace.

In 2025, payments aren’t just a back-office function; they’re a core part of the traveller experience. As customer expectations continue to evolve, so too must the systems that serve them.

Suby Valluri, CEO of FinMont, commented, “The payment experience is no longer just a backend function; it’s central to how customers perceive and engage with travel brands. At FinMont, we see payment orchestration not just as a technical solution, but as a strategic advantage. By simplifying complexity, reducing costs, and enabling flexibility, we’re helping the travel industry deliver better experiences and unlock new revenue opportunities in a highly competitive market.”

For travel companies, the path forward is clear: offer seamless, flexible, and transparent payment options. Invest in smarter infrastructure. And recognise that every transaction is an opportunity to reduce friction, build loyalty, and grow revenue.

The merchants and airlines that get this right won’t just improve their bottom line; they’ll shape the future of travel.