The Evolution of Travel Commerce:
Why Traditional Payment Systems Are Holding You Back

By Tom Randklev

Travel commerce is one niche in the travel industry that can be extremely lucrative. Thanks to the relative ease with which modern travellers can book trips by land, sea, and air, streamlined modern ecommerce has enabled consumers to quickly and easily purchase a range of optional extras when booking a trip. These extras can include additional transport, such as taxis of ferries, hotels and other accommodations, speeding boarding or member’s lounges, insurance, and even guided tours and leisure activities.

However, all of these depend upon effective payments. Without a fit-for-purpose payment solution that can handle the demands of travel consumers, travel businesses cannot expect to reap the profits they desire.

In this article, we’ll be discussing some of the major challenges currently facing the travel commerce market, how traditional payment solutions can make it harder to overcome these issues, and how Payment Orchestration could be the way to enable hyper personalisation and digital transformation. Read on to learn more.

All of the above issues feed into the payment options provided by travel companies. But how? Let’s examine each more closely.

The Cost of Enabling Payments

As we mentioned earlier, the costs of enabling online payments can become pricey – especially when one considers the sheer volume of transactions that travel agents’ online stores have to contend with daily.

Some of these fees include payment processing fees, usually a percentage of the transaction amount plus a flat fee, as well as convenience fees and interchange fees from banks.

The more payment options a store wants to add, the more third-party providers will have to be accounted for – and that means more fees.

Sustainable Payments

Online transactions, particularly those conducted via credit or debit cards, also come loaded with their own environmental impact. One of the downsides of collaborating with so many third-party payment providers is that a travel company will invariably become complicit in the emissions they create in facilitating these transactions. This all adds up to a steep environmental cost, which could seriously undermine the legitimacy of a travel company’s ESG efforts.

Security

Another issue that comes with working with so many different third-party payment providers is that it can potentially open up far more security vulnerabilities. Since there are more stakeholders involved in the payment process, there are also more opportunities for hackers and scammers to hijack valuable financial records or customer data.

The additional steps in the payment journey itself – particularly regarding authentication – also mean that there are more vulnerabilities for bad actors to exploit.

Compliance

It’s also increasingly challenging for travel company ecommerce merchants to keep up with the new regulatory changes that occur around the world, especially when they operate in multiple nations.

For example, Payment Services Directive 3 (PSD3) in the European Union has been a game-changer that many e-commerce merchants operating in the region have been scrambling to keep up with. PSD3 aims to protect consumers' personal data by making online payments more secure, transparent, and convenient. Of course, this has created numerous new hoops for providers and merchants to jump through.