Travel companies continue to struggle with the proliferation of payment options available to their customers, recognizing the need to upgrade their systems. Many report that their profit margins have been affected by outdated or complicated payment systems.
They are taking action, however, with nine out of 10 expecting to modernize their financial operations this year, according to a survey from Airwallex and Skift. While cross-border payments have become a profit center for many travel companies, they have also made their financial dealings much more complex. Many of the executives surveyed expressed interest in an all-in-one payment and financial operations platform.
Credit cards, debit cards, and digital wallets remain the most common customer payment methods for travel, but local payment methods and peer-to-peer systems are rapidly gaining popularity, especially in Asia. As a result, 70% of travel companies report that handling a variety of payment types across different markets has become increasingly complex.
On the other hand, cross-border payments have been a boon to many players in the industry. Nearly 40% of travel executives report that half of their revenues result from international customer payments. Two-thirds of respondents also said that cross-border payments have become more complicated due to the volatility of FX rates.
Progress in Asia
The survey covered companies in Asian countries such as Hong Kong and Singapore, where many systems have focused on simplifying cross-border payments for travelers.
Several initiatives have been launched recently to support this trend. Last year, China’s UnionPay International enabled merchants to accept 170 international wallets. Alipay + and Malaysia’s PayNet also announced that travelers to Malaysia can now make digital payments through major e-wallets, and Ant Group teamed up with the Korea Easy Payment Foundation in South Korea to offer cross-border payments to tourists from China and Southeast Asia.
Despite these advancements, travel companies still face concerns about spending. Nearly all the companies surveyed by Airwallex and Skift said they frequently make payments to suppliers or vendors in foreign currencies. Most noted that managing multiple supplier and vendor payments in different countries under the traditional payment and financial infrastructure is a key challenge.