The journey to recovery: What to expect from travel payment

With a sigh of relief, we’re now finally traveling beyond our front yards as borders open up once again. We can now start to look ahead and make plans for our next trip – or at least get together for a personal face-to-face meeting for a change of scenery.

But while we’re eager to start making plans, many have undoubtedly come to expect the level of comfort they experienced when purchasing online, where it takes just a few clicks to order and pay for items to be delivered straight to our homes. This is an experience that we’ve only grown more accustomed to over the past 18 months when there was nowhere to go.

With the travel industry restarting, are travel companies and their travel suppliers already on the same train, having integrated a fast and easy payment service into their businesses? Or do they have to wait for the next ride to get onboard?

Let’s explore!


First stop: The payment landscape

Looking back onto the landscape, we can see how much payment habits had already changed within the first six months following the outbreak of the pandemic. One estimate claims that two-thirds of transactions globally were contactless by that point, around three times more than in 2019.

Within these contactless transactions, some banks were reporting mobile wallet transactions being up 17% compared to 2019 – around double the growth rate predicted for 2020. And of course, e-commerce skyrocketed as the lock down came into force, growing by 146% across the US and Canada in Q1 2020 alone [1].

Another survey conducted among consumers found that 41% of respondents who said they often use cash have tried a contactless card during the pandemic [2]. Additionally, of survey participants who often use a card, 35% have tried a digital wallet and 27% have tried QR code-based payments.

These trends reflect the rise of interest in all things “contactless” during the past year. 


Viewpoint ahead: What’s on the horizon for travel payment?

Now that the travel industry is recovering from the COVID‐19 pandemic, travelers and travel companies alike are noticing changes few could have imagined just before the pandemic.

Customer expectations and behavior have changed during the pandemic which has directly affected the travel industry. This can be seen in the changed booking patterns as travelers are increasingly booking travel last-minute, directly impacting travel suppliers’ cashflow.

Last-minute prices were typically more expensive, with travelers often being rewarded for booking tickets early. One OTA executive commented that prior to vaccinations at the end of 2020, customers booked closer to time of travel, i.e. less than a month before for 80% of bookings [3].

What we are seeing now is that travelers require flexibility. Customers want peace of mind that they will not be left stranded or incur additional costs. By addressing this trend, travel providers can turn this need into a competitive advantage and regain consumer trust.

In particular, flexibility in terms of payment is an emerging expectation. As noted earlier, contactless payments have become more attractive during the pandemic. This reflects the change of payment habits in day-to-day life and travelers are looking to take this habit with them – not only for the convenience but also as an additional safety measure throughout their travels.

Furthermore, customers are seeking to be more cautious with their disposable income. Travel is not a necessity for most, after all. Payment facilities such as ‘buy now, pay later’ are becoming increasingly relevant on the consumer side, especially when purchasing big-ticket items such as airfare. Examples of such payment plan options are Fly Now Pay Later [4] or the travel payments service from Uplift [5].

That said, some travel providers have seen a shift from Alternative Forms of Payments (AFOPs) to credit cards, which o­ffer travel insurance and options for chargebacks.

Customers are indeed increasingly aware of the advantages o­ffered by credit cards with many press articles highlighting insurance, refunds and chargebacks as the biggest perks. Travel merchants have noticed this shift towards credit cards, while also taking into consideration local payment habits, cash flow issues and the cost of payment acceptance.


How to reach the travel payment destination

The pandemic proved to be the spark to advance innovations in payment technology born from customer demand.

The travel industry acknowledges that payment is a strategic growth and recovery driver. Results from an industry survey identified that several best practices are being considered by travel businesses, with two in particular standing out [3].

The first one is about offering digital-first and touchless travel to reassure customers (50% of respondents). The research revealed that 71% of travel operators are already implementing changes to make this happen, as contactless, QR codes and e-wallets are more in demand than ever.  

An example of meeting customer demand by investing in contactless payment solutions is illustrated by the cloud-based hotelier technology provider Guestline. Recent research from this provider found 20% of its hoteliers in the UK and Ireland say contactless payment solutions are the technology that received the greatest share of their investment budget in 2020 and more than a third (38%) say they plan to make investments in contactless payment technology this year [2].

A practical illustration of this can be seen in the upgrade to its online check-in solution GuestStay which focused on payments and checkout, in response to the identified need in the past year for smarter and safer guest experiences.

The development of new technologies and platforms are the way for hoteliers to achieve this, with the contactless experience - whether that be check-in, check out or payments - being one of the defining developments of the past year. Both hoteliers and their guests recognize the benefits that this technology offers and have been keen to adopt it.

The next best practice being highlighted in the survey is about implementing new payment models to respond to the change in customer demand and limit risk or cash flow issues (22% of respondents). Features like installment payments, "hold my fare" options, subscriptions and even escrow accounts for vacation payments are being implemented by airlines and OTAs in their efforts to win customers back and strengthen their loyalty.


The right track for the next travel payment ride

Despite occurring during a decade of global economic growth, the dip caused by the pandemic has made the travel industry reflect on the risks taken and mistakes made. Travel company businesses and payment processing models now need to be adapted to better prepare for the next time such a crisis occurs [6]. Trust must be rebuilt to prevent any further negative impact to the travel sector.

In order to do so, service providers need to understand changes in customer expectations and purchase behavior. They need to assess the state of payment and its prioritization within their organization to consequently work on how they can best use payments as a lever to rebound in the post-COVID-19 era.

A relevant range of payment methods must be o­ffered, from cards to alternative forms of payment, in order to meet customer demand and, in doing so, maximize conversion rate. Implementation of payment-related best practices can positively impact the financial situation of any travel business and it’s evident that many initiatives have already been undertaken in the meantime to make this happen.

Once the dust settles, the travel industry will return stronger and better managed than before. Travelers have started to travel again, and corporations will resume face-to-face meetings following a lengthy and creative period of social distancing.

Once properly the right track for departure, travelers and the travel industry will meet on the same train for a joint journey, looking at a hopeful horizon of a full return to travel and efficient travel payments.

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[1] COVID has changed payments for good: now’s the time to seek advice  |

[2] How the COVID-19 crisis is accelerating transformation of travel payments |

[3] How payments technology will fuel travel rebound |

[4] Fly Now Pay Later adds 10M to Series A |

[5] Uplift secures 68M credit line |

[6] Travel payment changes coronavirus | 

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