Top 4 payment challenges for online travel agencies

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With the value of online travel bookings estimated to hit $837 billion in 2017, it’s a good time to be an online travel agency (OTA).

But that doesn’t mean that claiming a stake in this huge market is easy. In fact, OTAs with international ambitions will face many challenges. One of the toughest of these is tackling payments. When it comes to settling transactions, OTAs face four crucial issues. Let’s explore this:

Complexity

If you run an OTA, your products will typically include elements from a large number of suppliers, many of whom are handling different currencies. When a traveler buys from your site, the cash needs to be separated into various payments, the payments need to be converted into various currencies, and then those amounts need to be released to suppliers at various stages. Trying to deal with all of this manually as an online marketplace is time-consuming, stressful and open to human error.

Fraud

In a 2013 study by Phocuswright, 37% of online travel companies cited e-commerce credit card fraud as their single biggest payment issue. When you look at the statistics, it’s easy to understand why. While the average brick-and-mortar travel agent deals with a 0.5% rate of fraud, the average online travel supplier’s is higher, at 1.5%.

Consumer protection 

New regulations in the travel sector designed to protect consumers often force OTAs to hold a traveler’s payment until the product has been used. Usually, this means keeping funds in escrow from the time the purchase is made until the time the trip is finally taken. Handing this and dealing with the long waiting period further complicates the settlement process.

Payment methods 

While credit cards might be the preferred choice in the US travel market, things aren’t so simple everywhere else. Throughout much of Europe, Asia, Oceania, Latin America, Africa and the Middle East, there’s much more diversity in consumers’ preferred payment methods, from digital wallets to transfers, to mobile and more. In order to sell in more than one region, you’ll need the flexibility to handle various payment methods.

A tailor-made OTA payments solution  

If you’re an ambitious online travel agent, you’ll need a payment platform that eliminates these barriers. This is where Payvision comes in. Our solution is designed to fit your unique needs.

We offer global card acquiring and can handle over 80 of the world’s most popular alternative payment methods. That leaves your hands free to expand your business into new regions without stressing about how the local consumer likes to pay. Plus, our SlicePay product simplifies split settlements, dividing a transaction’s payments between multiple suppliers and currencies in a sleek, automated system.

Security is also key for OTAs. With our 120+ risk checks and plugins, you can be sure every transaction is handled with the highest level of security. If needed, we also offer a secure escrow service, ensuring your consumers get the fullest legal protection and your settlements are released exactly when they need to be – without putting any extra pressure on your finance department.

Online travel payments can be complicated. That’s why we like to make it straightforward. Want to know more about how we do it? Get in touch with our Payment Experts to find a solution that works for you.

The author

We're a global payment processor that’s driven by a passion for technology and simplifying payments. With one single, secure platform, we power transactions for businesses across the globe. We know our way around the latest techniques in artificial intelligence, omnichannel strategies and advanced fraud prevention. The dedication to our clients shows – this is where we truly make a difference.

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