A Guide to Payment Processing for the Travel Industry

Why Payment Processing for the Travel Industry Matters More Than Ever

Payment processing has evolved from a back-office function to a strategic priority for travel businesses. As the industry becomes increasingly global and digital, the way you handle payments can make or break your customer relationships and directly impact your bottom line.

Here are three key reasons why travel businesses need to modernise their payment processing:

Evolving Customer Expectations

Customers like to use trusted, local payment methods when booking travel, whether it’s eWallets in Southeast Asia, debit and credit cards in Europe or BNPL in Brazil.

Travellers also expect one-click payments, stored payment details and the ability to pay across multiple devices. 

Payment flexibility has emerged as another expectation. Instalment payments and Buy Now Pay Later services have become popular, especially for higher-value bookings like family holidays or luxury experiences.

Payment Failures Directly Impact Revenue

Payment issues create immediate revenue losses that directly hit your bottom line.

Especially if you are processing international transactions without a local card acquirer. 

When processing with international acquirers, approval rates can be between 30% and 50% in some regions. But local acquirers, who process transactions within that region, can provide approval rates from 70% to more than 90%. That’s a 40% difference on the high and low end. For a mid-sized tour operator processing 1,000 bookings monthly at an average value of $500, this represents a potential revenue loss of $200,000 each month.

Legitimate transactions declined due to fraud screening can also represent 5-15% of booking attempts. Unlike retail, where customers might try again later, travel bookings lost to payment declines rarely return because travellers simply book with competitors.

Payment friction doesn’t just cost the initial booking—it eliminates all potential upsells and add-ons that would have followed, from seat upgrades to excursions and travel insurance.

Extra Costs of Poor Payment Systems

Beyond the visible revenue impacts, outdated payment systems create significant operational drains.

Manual reconciliation, payment tracking and dispute management consume valuable staff time. For smaller travel businesses, this often means key team members spending hours on payment issues rather than growing the business.

Handling chargebacks involves substantial operational costs per dispute without tools like Automated Pre-Dispute Resolution. For travel businesses with thin margins, these fees quickly erode profitability.

What Makes Payment Processing for the Travel Industry So Complicated?

The travel industry faces a unique set of payment challenges that go far beyond what most retail or service businesses encounter.

Multi-Currency Challenges

The global nature of travel means businesses must handle transactions across multiple currencies, creating several complications:

• Cross-border transactions incur significant foreign exchange fees that directly erode profit margins. Using a cross-border payment platform can help mitigate these costs.
• Exchange rate fluctuations are unpredictable and difficult to manage without the right tools.
• Different countries have varying banking protocols and settlement timeframes.

Regulatory and Compliance Hurdles

Travel companies operate in a highly regulated environment that spans multiple jurisdictions. This creates a web of compliance requirements:

• International banking systems have complex rules that vary significantly by country.
• Anti-money laundering (AML) requirements demand rigorous verification processes.
• Customer data protection regulations like GDPR impose strict rules on how customer information can be stored and processed.

Fraud and Chargeback Vulnerabilities

The travel industry is particularly vulnerable to chargebacks because of high-ticket purchases, frequent last-minute bookings and the delay between payment and service delivery.

Friendly fraud (when customers dispute legitimate charges) is especially prevalent in travel, where customers may claim services weren’t delivered as expected or try to recoup costs after already enjoying their travel experience.

How to Fix Payment Processing Challenges in the Travel Industry

The challenges in payment processing for the travel industry can be overwhelming, but the right payment processing solution can handle these issues. Follow these steps to get started:

1. Choosing a Payment Processor 

Getting paid shouldn’t be complicated. The first step is choosing a provider that makes it easy to accept payments online, wherever your customers are booking from. Here’s what to look out for:

• Multi-currency support – Pick a provider that can handle different currencies without piling on unnecessary conversion fees.
• Localised checkout – Let customers pay in their own currency. It’s more straightforward for them, builds trust and makes the booking process feel smoother.
• Clear fees – Go with a provider that’s upfront about what you’ll pay, especially for cross-border transactions.
• Global coverage – Make sure your provider can support your business in the markets where you operate today and those where you plan to grow in the future. 

2. Keep Fraud in Check Without Slowing Things Down

Travel bookings are a prime target for fraud, but there are ways to stay protected without making life harder for your customers.

Start with 3D Secure to add a layer of protection that only steps in when something seems off, so most customers won’t even notice it’s there. Add tokenisation, which lets you handle and store payment information for cross-channel and repeat payments without storing actual card details. 

Real-time fraud checks help spot anything suspicious on the spot, using data like device info, behaviour and booking patterns. And with machine learning, your system gets smarter over time, picking up on new fraud tactics while avoiding false positives that could block legitimate bookings.

4. Make Refunds and Cancellations Simpler

Refunds and cancellations are a regular part of travel, but if they aren’t handled well, they can lead to disputes and chargebacks. A straightforward process can make all the difference.

Many issues stem from poor communication and unclear policies. Make sure your cancellation terms are visible and easy to understand during the booking process.

Offering flexible options can also help reduce friction. Tiered policies allow customers to choose what suits them—lower prices with stricter conditions or more flexible terms at a higher rate.

On the operational side, aim to process approved refunds quickly and keep customers informed at each stage. Your system should also be able to handle partial refunds, in cases where only part of a booking is cancelled.

5. Optimise Mobile Payment Experiences

A complicated online payment processing experience can undermine otherwise excellent travel offerings. With many travel bookings now occurring on mobile devices, optimise the mobile booking journey with the following:

• Cut down the number of form fields and use auto-fill where possible to reduce effort on smaller screens.
• Accept options like Apple Pay and Google Pay to make payments quicker and more secure.
• Check that your payment pages display properly across all screen sizes and orientations.
• Let returning customers save their payment info securely, so they can book again without starting from scratch.

6. Selecting the Right Payment Gateway for Your Travel Business

When you’re selecting a payment gateway for your travel business, it’s worth looking beyond basic functionality.

The right choice should support your operations, improve the customer experience and reduce the effort needed to manage payments across markets. Rapyd has payment solutions tailored to travel businesses.