Many travel businesses struggle to grow, but it's not because of low demand. After all, 84% of travelers say they plan to travel either the same or more. It's because their current payment systems aren't aligned with their growth ambitions.
Take the example of an OTA expanding from the UK to several countries in mainland Europe. They can see that the demand for their services is there, but without the right payment infrastructure in place, approval rates will be unacceptably low. Is it worth the time and cost to expand if too many bookings are at risk of being rejected?
Problems like this stem from a merchant account built for the business you used to be, not the one you're growing into. This article explores what a travel-specific payment strategy looks like in practice, and what to look for in a provider that can deliver them.
Turn Payments into a Conversion Lever
Many travel businesses see payments as a backend cost, but they're so much more than that. Getting payments in travel right will allow your business to scale quickly, instead of simply accepting high cart abandonment and payment declines as inevitable.
A customer has chosen a destination, compared accommodation options, committed to dates and is finally ready to complete the checkout process. Anything that interrupts that moment costs a valuable booking that probably won't come back. Partnering with a standard payment processor interrupts it constantly with:
- Declined cross-border transactions
- Missing preferred payment methods
- Nasty currency surprises and hidden fees
- Security challenges that feel disproportionate to the purchase
Each interruption is a customer who leaves with a competitor's booking confirmation in their inbox instead of yours. With a cart abandonment rate of almost 85%, travel companies need to rethink their payment process to encourage customers to complete their purchases.
Where Approval Rate Uplifts Come From
A growth-focused payments strategy turns the checkout process into a deliberate conversion lever. Intelligent transaction routing routes each payment through the acquirer most likely to approve it, recovering revenue that would otherwise be lost to false declines. This is one of the single largest sources of unnecessary lost bookings in any travel business that processes internationally.
The mechanism behind this is local acquiring. When a payment is routed through an acquirer based in the customer's country, the transaction is treated as domestic rather than cross-border. Because of this, issuing banks are far more likely to approve transactions. The reverse is also true: international transactions processed through cross-border routes typically run authorization rates 15 to 25% lower than equivalent local processing, and cost 40 to 60% more in fees.
Dynamic currency conversion lets customers see and pay in their own currency without surprise FX at the final step, which removes one of the most common abandonment triggers.
Finally, offering a wide range of payment methods, including cards, digital wallets, bank transfers and alternative payment methods, means customers don't reach the very end of the checkout process only to discover their preferred option isn't available.
Make New Markets Economically Viable
Most travel businesses see the limits of their payment systems when they start talking about expanding into new markets. Generic payment processors classify travel as ‘high-risk’ because the gap between booking and travel looks like exposure to them. A booking taken in March for a trip in October sits on their books as months of liability they didn't ask for.
Their response is usually one of a few options:
- Refusing to underwrite the new market at all, demanding reserves that lock up working capital just when you need it most.
- Imposing volume caps that limit the very growth the expansion was meant to deliver.
Neither of these options is useful for a travel business trying to enter a new market quickly.
How Multi-Acquirer Payment Infrastructure Opens Up New Markets
A travel-specific merchant account removes the need for months of negotiation. Having access to multiple acquiring partners means the payment infrastructure for new currencies or regions is already there, so launches don't depend on hastily finding a new acquirer that might not offer the best terms. Plus, travel-specific underwriting accounts for seasonality and booking-to-travel timelines that generic providers might view as intolerable risks.
Instead of treating each new market as a separate project, with new contracts, underwriting, integrations and finance processes, choosing a travel-specific merchant account can make market expansion easier and reduce time to market.
For the OTA expanding into mainland Europe that we mentioned at the start, this is the difference between launching in one new country a year and launching in a dozen. Markets that once seemed too costly or slow to launch now make operational sense, because each new country becomes easier and cheaper to add as the payment infrastructure is reused.
Stop the Revenue Leaks that Get Worse as You Scale
Small payment inefficiencies are manageable, but only at low volumes. They can quickly become problematic at higher volumes, consuming a huge amount of time, money and energy. Scaling your business highlights these revenue leaks. The good news is that a travel-specific payments strategy can close them, and there are several ways to do so.
The Cost of Chargebacks
Travel is uniquely exposed to chargebacks. The sector accounts for roughly 1 in 8 chargebacks issued globally, and card networks treat a 0.9% chargeback rate as the warning threshold and 1.5% as the critical level that triggers monitoring programs, fines and, in the worst cases, merchant account termination.
Proactive chargeback management, which involves using tools to spot patterns, quickly gathering evidence and taking steps to prevent disputes before they happen, keeps chargeback ratios within the limits that acquirers like to see.
The Cost of International Payments
Then there's the cost layer of international payments. A 1.5% FX margin that goes unnoticed at low volume becomes a meaningful annual cost as bookings scale. Cost optimization in multi-acquirer setups uses customer location data and local acquiring to reduce processing fees on every transaction, improve authorization rates and deliver a much smoother customer experience.
Remove the Operational Burden from the Finance Team
Many travel businesses reach a point where the finance team is overwhelmed with managing payments. They have to reconcile accounts across different acquirers, currencies, and settlement schedules and assemble chargeback evidence by hand.
This team-wide overwhelm comes at a cost, both literally and figuratively. Finance teams who should be helping plan for future growth end up stressed, saddled with manual tasks and chasing updates. Decisions take longer, and new projects are delayed because there's never enough time to look to the future.
Create a Single Source of Truth
Partnering with a travel merchant account provider solves this issue with integrated control accounts. All international funds are consolidated in one place, and this allows finance teams to track funds from booking to settlement. Plus, automated matching speeds up the reconciliation process and reduces manual work by hours per team member per week.
Giving the finance team access to a central hub for managing fund flows provides full transparency across currencies and suppliers, so your business can grow without losing control.
How to Find a Travel Merchant Account that Supports Your Growth
The sections above show what a travel-specific payments strategy can achieve. Now it's time to find a provider that actually delivers these benefits. Here's some advice on how to do that.
Questions Worth Asking a Potential Travel Payments Partner
- How many acquiring bank relationships do you have currently, and what happens to my processing if one of them changes risk appetite at short notice?
- What are your typical authorization rates for travel businesses by region?
- What reserve requirements would apply to a business of my size and profile, and what's the path to reducing them over time?
- What's my total effective rate, including international fees, currency conversion, chargeback fees and reserve opportunity costs—not just the headline processing rate?
- How do you handle insolvency protection and chargeback management for travel-specific dispute patterns?
- What's the impact you'd expect your merchant account solution to have on a business of our size and growth trajectory?
Red Flags to Listen Out For
- "We process all international transactions through our US/UK bank"
- A single or very few acquiring bank relationships or evasive answers about what happens if that acquirer's policies change
- Reserves over 15%, hold periods over 120 days, or no clear path to reducing them as the business matures
- No specific data on authorization rates by region
- Limited currency support
- "We work with all types of businesses" as this may be a sign of a generic processor that doesn't understand the nature of travel payments
- No travel client examples or confusion about basic travel operations like booking-to-travel windows and seasonality
Specialized Features to Look Out For
The strongest travel merchant account providers offer the following features:
- Intelligent cost optimization: Smart routing uses customer location data to send transactions to the acquirer most likely to approve them at the lowest processing cost.
- Integrated control account services: Centralized fund flows that consolidate international transactions into a single source of truth for reconciliation, reporting and compliance.
- Robust security and compliance: PCI DSS compliance, tokenization, 3D Secure and travel-specific fraud prevention keep you and your customers safe from fraud.
- Dedicated support from travel industry specialists: An experienced support team that works in the travel sector. They will understand your business model, seasonality, long lead times and supplier dynamics.
Is your current payment setup slowing your growth? Contact the Repayd team today to find out how to scale without limits.
