Travel payment solutions: how to optimize payments and reduce costs

If you’re searching for travel payment solutions, you might be experiencing the following: 

• Payment failures are impacting your customer experience during peak periods. You need an easier way to set up and manage payment fallbacks. 
• As your transaction volume grows, your payment fees are racking up. You want to ensure you’re paying the lowest fees possible (while still using a reliable processor). 
• You know you need to add more payment methods, like Digital Wallets and Buy Now, Pay Later, but you don’t have the developer resources. 
• Making strategic decisions about payments is difficult because your data is in silos across different processors. You want to view all your payment data in one place. 
• You’re expanding into new regions and need to offer local payment methods and currencies, but you’re struggling to navigate compliance and integration challenges in each market.
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Tackling these issues isn’t just about fixing what's broken—it’s an opportunity to fuel your growth. By optimizing your payment processes, you can reduce friction at checkout, lower costs, open the door to new markets, and accelerate your business growth.

Read on to learn more about the common challenges in travel payments, solutions that can help, and how Primer can empower you to optimize your payments without taxing your internal team.

In this article, we’ll explore:

• Five common challenges in travel payments
• Key travel payment solutions to consider implementing 
• Why use Primer as your travel payment solutions
• How Primer helped Pelago offer different customer payment options based on region

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To discover how Primer can transform your payment operations and help you deliver a smoother customer experience, get in touch with our team.

Five common challenges in travel payments

The travel industry is booming. According to data from Custom Market Insights, it will grow from $485.1 billion in 2022 to over $1.5 trillion by 2032. This explosive growth is exciting and presents a huge opportunity to expand your business and reach new customers.

Payments are crucial in enabling you to seize this moment. Payments are the cornerstone of the exceptional customer experiences travelers demand. By addressing any payment challenges now, you can position your business to fully capitalize on this boom: unlocking new revenue streams, enhancing customer experience, and ensuring smooth operations as your business grows.

Here are the top five payment challenges we see when speaking with businesses in the travel industry.

1. You're losing customers due to payment failures during peak times

Relying on a single payment processor puts your business at risk. If that processor fails and you lack a backup, your customers cannot complete transactions, leading to lost revenue. The risk is particularly acute when demand spikes—like during sales, promotions, or the peak travel season.

In fact, forecasts suggested that UK travel businesses would lose £5.45 billion in 2022 due to failed payments alone, with an average of 13.4% of consumer payments failing.

This problem is compounded by the fact that travellers still need to travel. They will likely find an alternative provider—your competitor—to book their trip, and they may never consider using your service again. 

2. Payment processing costs are creeping up

Travel is inherently global, which adds complexity to merchants' management of payment costs. It’s not uncommon for businesses in the travel space to find that payment fees become one of the biggest line items on the balance sheet, especially when they start expanding into new markets without considering the underlying processors they’re using to collect payments.

Reducing these fees typically starts by adopting a multi-acquirer strategy that combines global acquirers with local acquirers in strategic markets who may offer better pricing. Then, it’s a matter of using intelligent routing to route each payment to the optimal processor. For example, you may want to route payments in France through PayPlug and leverage least-cost routing using Carte Bancaires. In the UK, you may use Checkout.com.

But remember, a payment strategy isn’t just about reducing costs. You must also ensure that you’re using the processors that will help you optimize your performance and realize as much revenue as possible. 

Learn more about the benefits of smart payment routing.

3. It’s taking too long to offer the right payment methods
Your customers expect flexibility regarding payments, and offering the right options is essential to meeting their expectations. In fact, 76% of consumers are likely to abandon a transaction if their preferred payment method isn’t available​. 

Imagine you’re a travel experience platform: if you offer a similar service to a competitor, but they provide frictionless payment options like Apple Pay or Google Pay, and you don’t, this could be the deciding factor for a customer. The ease of making a quick, secure payment with just a tap could make them choose your competitor over you, even if all other factors are the same.

This becomes even more important when expanding globally. Offering the right payment methods—including local preferences, like Alipay in Asia—can make or break a sale. However, integrating and managing these local providers is often time-consuming and resource-intensive, slowing down your ability to scale effectively.

4. Your payment data is fragmented across multiple providers

Although a multi-processor strategy offers significant advantages, it also poses challenges related to data management. For example, if you want a quick view of authorization rates across multiple processors, you’ll have to access each dashboard and collate the data manually. 

In contrast, utilizing a unified view through a payment infrastructure platform lets you track all your payment data in one place. This streamlined approach enhances agility and enables you to make swift, informed strategic decisions.

5. You're worried about fraud, and the financial and reputational damage it causes 

In 2023, the travel and leisure industry faced the second-highest rates of suspected fraud globally, with 36% of businesses reporting fraud-related issues.

One of the most prevalent types is chargeback fraud, where fraudsters dispute legitimate charges after booking a trip or service, claiming a refund while still utilizing the services.
An estimated 86% of all chargebacks are cases of intentional or unintentional friendly fraud.

Travel agencies are frequent targets due to their role as intermediaries. This creates ambiguity around who is responsible for payments, which fraudsters exploit, often leading to direct financial losses and reputational damage for businesses.

Taking proactive steps to prevent fraud and reduce chargebacks is critical for protecting your business as you scale. 

Looking for a payment infrastructure platform that can solve these problems? Book a call with our payment experts to find out how Primer can help. 

Key travel payment solutions to consider implementing 

Set up fallbacks, so you don’t lose revenue if your primary processor fails 

Having fallbacks in your payment setup is essential for keeping transactions flowing when your primary processor encounters issues. If your primary payment processor fails, you can automatically route the payment through a fallback processor, allowing transactions to continue without your customers noticing a disruption.

Imagine your company faces a surge in transactions during a hectic summer season. If your primary payment processor goes down and you don’t have a fallback, you could miss out on high-value transactions, frustrating customers who may turn to competitors. In addition to keeping payments flowing smoothly, fallbacks help to protect your brand reputation.

At Primer, our merchants have seen a 20% recovery rate when using fallbacks to retry payments with a different processor automatically​. 

Read more: Why merchants should build a fallback strategy

Strengthen security and prevent fraud with network tokenization

Network tokenization enhances payment security by substituting sensitive card information with unique tokens, making them much harder to exploit. Visa data shows that token-based payments reduce online fraud by 30%. 

For instance, when a customer books a last-minute flight using a tokenized card, even if a fraudster accesses the original card details, they cannot use the token elsewhere because it is tied specifically to that merchant. This mechanism effectively blocks unauthorized transactions, safeguarding the customer and the business.

Also, network tokens remain valid even if a customer’s card is replaced or expires. This ensures that merchant-initiated transactions, such as booking charges or flight changes, can continue without interruption. Consequently, businesses avoid the hassle of contacting customers for updated card details, maintaining smooth payment flows.

Beyond preventing fraud, network tokenization can increase authorization rates by 4.6%, allowing travel businesses to minimize failed transactions and capture more revenue.

Use intelligent payment routing across your operations 

For global travel companies, accepting cross-border payments can quickly become costly without the right payment strategy.

Intelligent payment routing helps by orchestrating transactions to the optimal processor based on your chosen criteria: such as the most cost-effective or highest-performing processor. 

The challenge is adopting a multi-processor strategy, and building an intelligent payment routing solution is incredibly time-intensive and resource-heavy, especially for businesses where payments aren't a core competency. As a result, many continue struggling with a single processor or a less-than-optimal multi-processor setup.

Using an infrastructure platform like Primer enables the seamless addition of multiple processors without any engineering effort. Once set up, you can effortlessly create complex routing flows based on hundreds of conditions using our no-code Workflows. In short, we make it easy to achieve your payment goals of reducing costs, enhancing payment performance, and mitigating fraud.

Add more flexible payment methods (such as Buy Now Pay Later and digital wallets)

Offering your customers a more comprehensive range of payment options is necessary to optimize your payment performance and reduce cart abandonment.

That could mean offering specific local payment methods in particular markets, like iDEAL in the Netherlands. It could also mean ensuring you offer digital wallets like Google Pay and Apple Pay for easy checkout for travelers using their mobiles on the move. It could also mean offering BNPL to make your high-ticket services more available to a broader range of potential customers. 

Why use Primer as your travel payment solution?

A unified payment infrastructure platform, like Primer, simplifies payments by integrating everything—your payment processor, payment methods, and data—into a single platform.

Once you integrate with Primer, you don’t have to worry about setting up a connection to each processor’s API. Primer integrates with multiple global payment processors, allowing you to tailor your payment stack for different regions without further integration. 

Our optimization suite, featuring tools like payment orchestration, intelligent routing, and tokenization, helps lower payment fees, enhance security, and mitigate fraud risk.

And with our platform, you gain real-time insights into all your payment data in one place, empowering you to make faster and more informed strategic decisions.

Primer already powers payments for top travel brands like GetYourGuide, Pelago, loveholidays, and Hellotickets, allowing them to manage complex payment needs more efficiently, reduce costs, and provide a frictionless customer experience.

Here’s what you get when you use Primer: 

Increase authorization rates with automated fallbacks, network tokenization, and agnostic 3DS

The travel industry faces some predictable peaks and valleys: such as the summer holidays or Thanksgiving and Christmas. When the high-traffic periods hit, you must have automated fallbacks in place in case your processor fails.

For example, imagine your payment processor going down over Christmas, leading to thousands of stressed customers switching to a competitor because they can’t complete a transaction. Not only do you lose the conversion, but you also probably lose long-term business.

With Primer, customer payments would automatically reroute to a fallback payment processor if a processor goes down. Not only would Primer switch providers, but our platform allows you to select the best provider to use based on the criteria you choose (such as most competitive pricing or highest payment success rates).

(Keep reading to learn more about how Primer can reduce your fees.)

Automated fallbacks are just one way that Primer can improve transaction success rates. We also enable travel businesses to harness the power of network tokens. Primer acts as a centralized Technical Service Provider (TSP). It provides merchants with a unified approach to network tokenization, helping to simplify network token generation, application, and management.

We also have Adaptive 3DS. The solution only issues a 3DS challenge to the customer when necessary, minimizing friction during checkout. By dynamically deciding when a 3DS challenge is required, merchants can reduce unnecessary interruptions, leading to higher payment success rates and a smoother customer experience. 

This tool has proven highly effective, helping businesses recover significant revenue by preventing customers from abandoning transactions due to unnecessary authentication steps.

Reduce payment processing costs with intelligent routing

As transaction volume increases, so do payment fees, leading companies to seek ways to lower processing costs.

With Primer, you can reduce these costs by implementing intelligent routing. Primer directs payments to the most suitable provider based on your specific criteria.

With Primer, you can reduce these costs by implementing intelligent routing. Primer directs payments to the most suitable provider based on your specific criteria.

You can customize your payment flows according to attributes such as BIN data, customer IDs, and payment methods. You decide how to filter payments based on your business needs: whether you want to focus on the lowest cost, the highest success rate, or the lowest fraud risk.

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Global travel agencies, for example, could route European transactions through local acquirers for lower fees while prioritizing success rates for higher-risk markets.

As your payment strategy evolves, you can quickly adjust your payment routing to align with your goals, as all Workflows are built without code.

It’s also worth noting that Primer handles all PCI compliance obligations, so you no longer have to manage this internally. By taking care of compliance, we reduce the administrative burden and free up your resources, helping you lower costs across the board. 

Cater to local payment preferences quickly and flexibly with Universal Checkout

Adding local payment methods and customer favorites like BNPL can make a big difference in conversions. However, they require development resources to implement, which your business might not be able to spare. But this isn’t a problem with Primer, as we enable you to switch on whatever payment methods you need in just a few clicks.

With Universal Checkout, deciding what payment methods to show to customers is simple: you simply toggle on or toggle off. We also deal with localization, presenting the checkout to your customers in their local language and using their local currency. 

Primer’s headless Universal Checkout allows you to customize your checkout experience if you need even more control. While a little more complex than our drop-in offering, you can still make UX changes quickly without engineering support. 

Refine your payment strategy with real-time insights from the Observability dashboard

Access to the right data is the key to building a strong payment strategy. However, it’s challenging to do that if you have to log into each processor separately to access the data you need—especially when the data uses slightly different standards.

Primer’s Observability Dashboard consolidates payment data from all processors and methods into one place, eliminating the need for multiple logins and payment platforms. It also translates the nuances of each payment processor into a single standard, giving you a centralized view of your payment performance, helping you make faster, more informed decisions on your payment strategy.

You can filter data by processor, MID, decline reason, and more, enabling a detailed analysis of performance across different markets and processors. You can also export payment data through external APIs and ETL, making integrating insights into your internal systems easier for even deeper analysis. 

With proactive optimization, Primer provides real-time, actionable insights that help you spot trends and adjust your payment routing to improve authorization rates and boost revenue. With customizable alerts and anomaly detection, you’ll be notified of any potential issues in real time so you can stop payment problems in their tracks. 

How Primer helped Pelago offer different customer payment options based on region

Pelago, a travel experiences platform under Singapore Airlines, offers activities, attraction tickets, and tours in over 150 countries. 

As Pelago expanded into other APAC markets, they faced challenges with their single global payment processor, which couldn’t meet the specific requirements of each region.

Primer stepped in to help Pelago integrate multiple region-specific payment processors quickly. With Primer, Pelago can now intelligently route payments using different processors for USD and EUR transactions, optimizing both costs and conversion rates.

Primer’s Universal Checkout also empowered Pelago to dynamically present payment options based on customer location and preferences. For instance, in Singapore, they prioritize PayNow for cost efficiency, tailoring the payment experience to each market’s needs.

Read the full case study: Pelago creates new horizons for travel and payments with Primer

Use Primer as a travel payment solution

Primer simplifies complex payment operations for travel businesses, allowing you to easily integrate with multiple processors, support local payment methods, and optimize costs – no matter where your customers are.  

Discover how Primer can transform your travel payment strategy. Book a call with our experts. 

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Sources:

• ‍https://www.globenewswire.com/en/news-release/2024/06/19/2901100/28124/en/Global-Buy-Now-Pay-Later-Analysis-Report-2024-BNPL-Market-to-Reach-1-209-9-Billion-by-2030-with-a-CAGR-of-21-5-Trends-Forecasts-and-Competitive-Landscape.html
• https://visa-commercial-solutions.visa.com/knowledge-hub/tokenization-a-deep-dive
• https://www.cnbc.com/2023/12/20/apple-pay-card-cash-and-wallet-affected-by-hours-long-outages.html
• https://www.business-money.com/announcements/lack-of-payment-options-force-76-consumers-to-abandon-digital-purchases/‍