An airline payment solution is a specialized system that allows airlines and travel companies to process customer payments for flights, ancillary services and other travel-related transactions.
As traveler expectations, financial pressures and fraud risks evolve, choosing the right airline payment solution is a vital decision that will shape your business's future. Airlines, online travel agencies (OTAs), and travel management companies rely on airline payment systems to ensure a secure and efficient payment experience for their customers.
So, how do they differ from standard payment solutions? Tailored to the unique financial flow of travel payments, airline payment solutions are designed to handle:
- Multi-currency pricing and foreign exchange
- Industry settlements (e.g., ICH and BSP)
- Payments for ancillary services like baggage fees and seat upgrades
- Intricate refund and exchange regulations
Today's travelers expect payments to be near seamless. They want the option to use the payment method that works best for them, and meeting these expectations will help your business attract and retain customers. What was once a simple backend process is now a key part of the customer experience.
Why 2025 is a Pivotal Year for Airline Payment Systems
It's a transformative year for airline payment systems. 2025 has thrown travel providers a mix of challenges and opportunities, including but not limited to changing traveler demographics, regulatory changes, financial pressures and the continued rise of AI:
Shifts in traveler demographics
A fundamental shift in who is traveling presents an opportunity for travel companies. As digital natives, Gen Z travelers expect travel payments to offer convenience and flexibility. For airlines and OTAs, this provides the perfect opportunity to connect with this influential market segment.
Younger generations are moving away from traditional payment methods such as credit cards in favor of digital wallets and Buy Now, Pay Later. With 54% of Gen Z already using digital wallets like Apple Pay and Google Wallet, offering customers their preferred digital payment methods is non-negotiable.
Interestingly, a growing number of younger travelers are exploring the option of paying for their travel experiences with cryptocurrency. This presents an opportunity for innovative airlines to offer borderless, faster and lower-cost transactions to attract new customers.
The shift in traveler demographics is driving demand for convenient digital and cryptocurrency payment options, providing a golden opportunity for travel providers to adapt and attract this influential market.
Regulatory changes loom
Later this year, the Payment Services Directive (PSD3) and the Payment Services Regulation (PSR) are expected to be formally agreed upon and published by the European Commission. The measures aim to:
- Combat and mitigate payment fraud
- Improve consumer rights
- Level the playing field between banks and non-banks
- Improve open banking functioning
- Improve cash availability in shops and via ATMs
- Strengthen harmonization and enforcement
The providers who prepare for these shifts are the ones best positioned to succeed. By getting ahead of new regulations that introduce more robust fraud protection, like Strong Customer Authentication (SCA), travel companies can gain a competitive advantage. By adhering to regulatory requirements, you'll reduce your chargeback ratio and build much-needed trust with fraud-conscious travelers.
Financial pressure on airlines grows
Airlines are under significant financial pressure. Rising fuel, labor and operational costs are requiring them to reduce overheads and optimize costs wherever possible. One area ripe for cost optimization is payment processing. Costs associated with payment processing come in various forms, including interchange fees, cross-border and currency conversion fees, chargebacks and fraud.
It doesn't help that airlines face significantly higher chargeback rates compared to other industries, due to the high-value ticket transactions, which expose airlines to payment fraud. In 2025, the average chargeback value for travel and hospitality is $120 – the highest across all industries.
With costs mounting and fraud on the rise, airlines are understandably keen to optimize their payment processing systems.
How will AI impact airline payment solutions?
Speaking to PhocusWire earlier this year, Martin Smillie, senior vice president for communications at data exchange at SITA, said, "New threats need new counterbalances and that means investing and more sophisticated forms of threat protection." And this is where AI comes in.
AI offers many opportunities to improve existing airline payment solutions. With AI-powered fraud detection, static rules are replaced by dynamic ones. This gives travel companies the ability to not only block fraud but also approve more legitimate customers, which protects revenue.
But it's not only fraud detection that stands to benefit from AI. The technology can also improve payment routing. By analysing every transaction, AI can optimize the route to the most suitable payment provider, reducing the number of false declines and leading to higher approval rates. Through more sophisticated fraud detection and intelligent payment routing, AI has the power to boost approval rates – and strengthen customer confidence in the process.
Key Priorities for Modern Airline Payment Solutions
In 2025, airlines are seeking payment solutions that offer the following features:
Global payment acceptance
Today's travelers are truly global in nature, and the payment systems they use should be, too. They want to spend their money with travel companies that accept multiple currencies and cater to their preferred payment methods.
Repayd, the leading travel merchant account and card processing solution, is built for global payment acceptance, allowing you to confidently grow your business without borders. You'll be ready to serve every customer no matter where they are in the world.
Real-time payment processing
Airlines face significant payment challenges. Advance bookings create a high-risk environment for chargebacks and fraud, while instant transactions are essential for cash flow. By combining fast payment processing with built-in financial protection, Repayd mitigates risk for travel providers, making payments secure, quick and accessible – as they should be.
Fraud prevention and risk management
Travel is considered a ‘high-risk’ industry. Insolvencies, disruptions, fraud and high insurance premiums are every travel company's worst nightmare. Thankfully, there are airline payment systems out there designed to combat fraud and manage travel industry-specific risks.
Repayd provides a full-scale fraud prevention system designed to lower the chance of outright fraud and friendly fraud and reduce your chargeback ratio.
Here's how it works:
- Repayd's monitoring system flags suspicious transactions based on the card/cardholder characteristics.
- Dynamic fraud settings based on your traveler's location protect your business whilst maximising conversion.
- You also benefit from specific fraud rule settings developed over years of processing bookings in the travel industry.
- Repayd's dedicated fraud specialists handle all fraud and chargeback cases, allowing you to focus on running your business.
Cost optimisation
With the travel industry under significant financial pressure, more airlines are looking to reduce payment-related costs through cost optimisation solutions, including dynamic currency conversion (DCC). DDC allows international customers to pay for flights in their own currency at the point of sale, increasing sales for airlines and OTAs.
With Repayd, you can receive payment from your customers in a different currency from what you want to receive, and pay your suppliers in different currencies, too. And it's all commissionable to you!
Easy booking system integration
You want to purchase an airline payment solution that simplifies your operations rather than complicating them. That's why Repayd integrates with your existing booking system, allowing you to:
- Create and view your bookings
- Keep track of all your transactions
- View your statements
- Know when your next payout will be and how much you will be receiving
- Review your ledger to check payouts have been processed
On top of that, Repayd's analytics capabilities allow you to analyze your transactions to see where in the world your customers are coming from.
Choosing the Right Airline Payment System Provider
The airline payment system you choose could help you reduce payment processing costs, attract more customers and build your reputation. It's all about choosing the provider best suited to your needs. Here are the questions you need to be asking during your search:
Does the provider offer the capabilities you need?
The provider you choose should provide you with the tools you need to welcome customers from around the world with a wide range of payment options. Fraud prevention capabilities should be tailored to the specific fraud risks of the travel industry and be as robust as possible, without damaging conversion rates.
Are they a familiar and trusted provider?
The booking process sets the tone for your customers' entire experience, and the right travel payment partner will make the booking process frictionless for them. It should reflect the quality of your business in terms of reliability, security and ease of use.
By doing everything possible to ensure customers feel confident booking with your travel company, you can begin their experience on a high note, and that builds loyalty.
Do they specialize in your industry?
A payment provider designed specifically for airlines, OTAs and travel management companies knows the challenges you face, and has created solutions that allow you to give your customers the best possible payment experience. Far from a one-size-fits-all solution, a specialized airline payment system provider has solved these problems for others and is ready to do the same for you.
Repayd is the leading merchant solution for the international travel industry, and our mission is to make global payments simple, secure and reliable for travel businesses worldwide. Get in touch today to discover the difference a specialized airline payment solution can make to your operations.
