60% of online travel agencies struggle to find payments partner

New data from Thredd reveals that over half struggle to find qualified payments partners with the necessary expertise to support and guide them

Payments are always a key focus for any company, but particularly for those who trade solely online. 32% of businesses agree fraud is their top priority when it comes to improving the B2B payments landscape for online travel agencies (OTAs). 

With virtual card transactions expected to exceed 121 billion by 2027, the need to make seamless payments to a global supplier base has never been greater. 

Globally, B2B travel transaction volumes are projected to reach $1.7 trillion by 2027, with the Asia-Pacific (APAC) region in the lead as the fastest-growing market. It’s expected to reach $480 billion in the same year. The opportunity is ripe for payments providers who can solve common payments challenges. 

For payments businesses who can deliver more efficient and transparent processes there is a growing customer base as more personnel return to travel and businesses in emerging markets expand. When further considering opportunities to serve the travel sector the payments industry is increasingly looking at the corporate expenses experience, with the market expected to grow at a Compound Annual Growth Rate (CAGR) of 11.5% through 2028.  

As part of their research, Thredd interviewed several clients including cross border and travel payments businesses, Nium and Caxton. The report highlights how many businesses are introducing modern solutions such as virtual cards to reduce fraud and other issues highlighted in the report including traceability and speed. 

Spencer Hanlon, global head of travel payments at Nium, said: “In this age of innovation, travel payment processes remain stuck in the past. Online travel agents and intermediaries demand flexible, secure, and cost-effective ways to pay and get paid.” 

Alana Parsons, chief operating officer at Caxton, commented: “A good payment solution should not only facilitate transactions but also contribute to process efficiency, enhance the customer experience, and help manage costs effectively. Look for a partner with thorough knowledge of the travel industry and the ability to customise solutions to your specific requirements.” 

Jim McCarthy, chief executive officer of Thredd, said: “One important impact of the technological advances in the travel industry is the emergence of new players – many of which we are proud to support – that are helping travel providers streamline the myriad systems, players, standards and options at play within the payments ecosystem, particularly with the growth of country-specific financial regulation.”

Image: John McArthur on Unsplash

Robert Welbourn Robert Welbourn is an experienced financial writer. He has worked for a number of high street banks and trading platforms. He's also a published author and freelance writer and editor.