Payments as a Service (PaaS): How travel trade can benefit

It seems that everything is a service these days. Content, infrastructure, mobility – you name it, it has been transformed into a service-based product.

And now it’s payments turn.

The ‘as a service’ trend represents a larger shift in the market where the adoption of cloud and digital technology make it possible to outsource certain services, improving their accessibility and usability.

With Payments as a Service, as the name suggests, it’s the payment process that is sold as a service. Different aspects of payment from the payment card itself to reconciliation software are now on offer.

It’s no small market either. According to one report, the Payments as a Service market is expected to grow to $53.6 billion in value by 2031 – a significant increase from 2021 where the number stood at $8 billion. [1]

And there’s one industry in particular where PaaS is set to make a splash: travel trade.

But while we can find a whole jungle of providers offering Payments as a Service out there, not everyone swimming in this water knows how to swim.

That is to say, to understand and use Payments as a Service in an effective way, you need an expert who can help you. And we know a thing or two about travel payments. So, let’s dive in.

What is Payments as a Service?

Payments as a Service refers to a business model where third-party providers offer online payment processing and management services to other businesses or organizations. These payment services are centrally hosted, delivered digitally and licensed on a subscription basis.

The types of payment services on offer are broad. They can include anything from accepting and processing various forms of payment such as credit cards and debit cards, to providing fraud detection, reporting and analytics.

In fact, essentially all aspects of the payment workflow from both an implementation and operational perspective can now be accessed via the PaaS model.

That’s a basic overview, but it’s worth taking a closer look at how PaaS works.

How does Payments as a Service work?

You’ve likely heard of SaaS or ‘Software as a Service’ before. With this model, you essentially pay for access to software over the internet or cloud technology.

Payments as a Service is an offshoot of the Software as a Service model, where the software in question involves payment solutions. However, there is also overlap with the Infrastructure as a Service (IaaS) model too, in that it provides access to a broader payment infrastructure.

Generally, it involves fintechs and other more technology-driven financial institutions developing the software, network and other tools necessary to provide and or facilitate the payment service in question before offering this onto potential customers. They handle all the underlying infrastructure which the customer pays to use.

All these services utilize APIs – application programming interfaces.

Put simply, an API is a means for programs to communicate with one another – in this case, the PaaS provider’s user-facing application communicates with the central server (usually living in ‘the cloud’).

Examples of Payments as a Service

As mentioned, the payment space can be very diverse. Here are a few examples of PaaS you may be familiar with:

Embedded payment services

Embedded payments, the integration of financial services into non-financial offerings, is the quintessential use case of PaaS and is expected to exceed $138 billion in value by 2026. [2]

Uber is one example of embedded payments in action, providing a frictionless, in-built payment system in the app that just happens to be compatible with our AirPlus Company Account.

Payment gateway services

Payment gateways are platforms that authorize and process credit card or direct payments for online businesses – incredibly important when it comes to acceptance and security.

PayPal is one of the biggest brands here, allowing businesses to accept credit card payments online.

Digital wallet services

Digital wallets are pretty self-explanatory. They store payment cards and other things like boarding passes in digital form – something you often see with mobile payments.

Apple Pay, which now works with our AirPlus Corporate Cards, allows customers to store payment information and make purchases with a single tap.

Virtual card services

Virtual cards are like regular physical credit cards, but digital. The benefit is that you can generate a new 16-digit card number, expiration date and CVC code at a moments notice, offering incredible flexibility.

Our AirPlus Virtual Cards Travel Trade are a prime example of virtual cards that enable you to not only pay simply and securely online, but also reconcile transactions and invoices with ease.

And that makes for a great transition to the other half of our topic today, which is where we look at how and why PaaS is so important for travel trade payments.

Travel trade payments pain points

Travel trade is in a unique position. The industry is diverse, containing a mixture of B2B and B2C businesses. The same can be said about travel payments, too.

Did you know?

Travel trade refers to the buying and selling of travel products to either end consumers or other travel businesses. Examples of travel trade businesses include travel agencies, online booking engines, bedbanks, aggregators, travel management companies and more.

In one study of travel companies, 41% cited the complexity of managing payment systems as the biggest source of payment-related financial stress. [3]

So, a significant portion of companies in the travel industry are looking for better payment management solutions. While this is a trend seen across industries as payments become more complex and diverse, travel businesses in particular face some unique challenges that make things more complicated.

Here are a couple examples:

Payment collection

First there is the issue of collecting payments from customers. This is particularly difficult in situations where customers are booking travel arrangements in advance and may cancel or change their plans.

Now it seems that advance bookings are happening earlier, with our data finding that travelers started booking further in advance (21.4 days) in the second half of 2022 compared to 2021 during the pandemic (16.3 days). [4]


Many travel trade companies struggle with managing the complexities of multiple payment methods, such as credit cards, online payment systems, and other alternative forms of payment.

Localized payment is now an expectation amongst travelers, and naturally the means of payment in B2B circumstances can be just as contentious. There is plenty of evidence that suggests this is the case.

For example, a survey of UK consumers and business leaders found that a quarter of shoppers would consider abandoning their purchase if their preferred payment method wasn’t available. [5]

Payment processing

Payment processing is another headache. As with all businesses, the reality of chargebacks and fraud need to be dealt with, but when it comes to the travel industry, cross-border payments become a much bigger concern.

Cross-border payments are naturally a common occurrence for travel businesses, which comes with numerous issues: currency conversion risk, regulation compliancy, high transaction fees, longer processing times, and merchant account and payment gateway issues.

With many expecting the B2B cross border payment market to grow by 30% to $35 trillion in 2022 [6], businesses will need a solution to overcome the many issues.


When all is said and done, those transaction and invoice need to be administered and reconciled. Travel traders need to ensure that payments are properly applied to the correct bookings and that all invoices and payments are appropriately reconciled with the various travel suppliers they work with.

With many processes still being largely manual, this can become tedious, time consuming and expensive. And that’s not to mention the many data discrepancies that come from the inconsistencies in the data provided by different suppliers.

Thankfully, Payments as a Service can help businesses overcome many of these issues by augmenting their payment stack.

That means enabling more thorough payment collection, broadening acceptance, better payment processing, and automated reconciliation. And that’s not all.

How travel businesses benefit from Payments as a Service

Payments as a Service are enabling travel trade companies to overcome many of the common payment issues the industry faces. On top of overcoming these pain points, PaaS comes with plenty more benefits too:


Businesses of all sizes can benefit from the PaaS trend thanks to its scalability. The combination of flexible pricing and the subscription model mean your payments needs can always be fulfilled no matter how much it grows.


It’s difficult to be a jack of all trades. And yet, those in Travel trade are often expected to master it all. Thankfully, PaaS grants your business access to payment specialists who can provide support as well as a top tier payment solution.


For a dynamic industry like Travel trade, the agility offered by Payments as a Service is a major boon. Due to the nature of the model, it becomes quicker and easier to swap out services for newer, more modern options.


Payments can be tricky. With PaaS, businesses can outsource their payment processing needs and focus on their core operations: travel services. PaaS is quick to implement and integrate into the business workflow, especially when compared to building in-house solutions.


As with any ‘as a Service’ offering, Payments as a Service makes payments more widely accessible when it comes to cost. PaaS enables travel businesses to manage the payment process without having to invest in the underlying infrastructure, which is expensive to maintain and difficult to scale.


In the same way that you gain access to payment specialists, you also get your hands on an industry-integrated solution. The travel industry is surprisingly interconnected and having the right tools will make life a lot easier – at least when it comes to payments.

The modern payment solution for travel businesses

Payments are getting more complicated and expensive. New regulations and platforms are appearing, making the payment process a headache to manage.

This is especially true for travel trade companies which have to deal with cross border payments, juggling multiple booking engines and tough competition.

Payments as a Service enables travel businesses to outsource these payment woes and gain solutions that provide more value with each transaction. No more headaches – PaaS provides modern payment solutions that are convenient and can even help you save.

Sound good? Look no further than the AirPlus Travel Trade Payment Suite. Whether you are looking for a virtual card or a solution that is deeply integrated into the travel industry, we are here to help.

Or if you like to get news and insights into B2B payment. travel trade and more to your inbox, then consider subscribing to our newsletter..


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