Traditional airline retailing: We have reached the ceiling, so what next?
For decades, the Global Distribution System (GDS) was the undisputed backbone of travel. It provided
We interviewed Päivö Eerola, CEO of Pax2Pay, the payments platform built for travel and part of Paxport Group, on why paying suppliers costs travel companies more than it should.
Why are travel payments more complex than ecommerce?
Behind the scenes, travel payments often feel stuck in the past. Why are they more complex than standard ecommerce, and why is now the time to modernise?
When you buy something online, the shop gets paid and the parcel arrives a couple of days later. Done.
Travel doesn’t work like that. For a typical OTA or travel management company, one booking can mean paying an airline, a hotel, a transfer company and a local operator. Those payments are often in several currencies, and they happen weeks or months before the trip. That’s not one payment but a chain of them, and many agencies still manage that chain the way they did 15 years ago.
For a long time, everyone accepted that as “just how travel works”. It isn’t acceptable anymore, because it’s expensive and it ties up working capital. For OTAs and TMCs already running on thin margins, that’s real money. It’s margin leaving the business for no reason other than outdated infrastructure.
What are the 3 most damaging payment bottlenecks for travel businesses today?
The same three come up in almost every conversation we have with OTAs and TMCs. First, paying suppliers abroad costs too much. Second, matching every payment back to the right booking takes far too much time. Third, agencies tie up cash paying suppliers upfront, months before the trip, which leaves them exposed if something goes wrong.
Each one is hard enough on its own. Together, they quietly decide how much margin a travel business keeps.
Problem 1: Paying suppliers abroad costs too much Travel companies pay hotels, airlines and local operators across borders every day. How do traditional payout methods eat into margins, and how is Pax2Pay different?
Imagine your money passing through two or three banks before it reaches the supplier, and each one takes a small cut. You never see it happen. You just notice that less arrived than you sent.
That’s FX cost in a nutshell. Cross-border payments still cost several times more than domestic ones, and part of that cost comes from the chain of banks each payment passes through. [1]
We built Pax2Pay to reduce the number of intermediaries a payment passes through. OTAs and TMCs can hold funds in more than 20 currencies, and we keep adding more. That means they can pay suppliers in local currency, with fewer currency conversions along the way. Because Pax2Pay cards can earn rebates, part of what used to be pure cost can come back as income.
Problem 2: Reconciliation eats your finance team's time Finance teams in travel dread month-end reconciliation. How can travel companies take the pain out of it, and how does Pax2Pay help?
Ask any finance lead at an OTA or TMC what they dread most each month, and reconciliation comes up almost every time. It means matching booking references to bank statement lines by hand, hundreds of times a month.
Slow reconciliation has a knock-on effect on the whole month-end close. The more systems a business runs, the more connections it needs back to its ledger, and tracing each entry back to invoices and other source documents adds even more time. [2]
Our approach is simple: don’t clean it up at the end, build it in from the start. Pax2Pay attaches booking data to each virtual card automatically when it’s created, so the details are already there when the payment goes through.
Problem 3: Fraud risk and tied-up cash Long gaps between booking and departure raise the risk of fraud and cash flow problems. How do virtual cards help, and how does paying at authorisation keep cash in your account for longer?
Travel businesses face a wide range of fraud, from account takeover and card-not-present fraud to false refund claims.[3] Friendly fraud is a growing part of the picture. That’s when a cardholder disputes a purchase they genuinely made. Visa estimates it accounts for around 20% of fraudulent disputes worldwide, and up to 30% for high-volume online merchants.[4]
Much of that risk sits on the customer side of a booking. When it comes to paying suppliers, we’d rather design risk out of the payment itself than manage it afterwards. Across all Pax2Pay card transactions in H1 2026, our fraud rate was around 0.014% (as of September 2026).
Virtual cards help in two ways:
- Control. You set a limit for each card, and authorisations above the limit are declined.
- Timing. We only take money from your balance when a payment is authorised. You don’t need to load each card in advance or sweep leftover funds back afterwards. Your money stays in your balance until a supplier actually charges the card.
Getting started, and advice for 2026
Many travel companies put off changing payment systems because they fear long, complex IT integrations. If a business already uses an industry platform, how quickly can it start using Pax2Pay?
It’s the question I hear most, and I understand why. Nobody wants a six-month IT project just to change how they pay suppliers. The good news is that switching to Pax2Pay isn’t that kind of project.
Pax2Pay works alongside the platform you already use rather than replacing it. If you already issue cards or process payments through an existing system, adding Pax2Pay is more like plugging in an extra socket than rewiring the house.
Once a client passes our KYC checks, we can have them set up and ready to transact the same day. After that, the timeline depends on how quickly the client is ready to go live.
What’s your one piece of advice for a travel CFO or operations director planning to scale globally in 2026?
Sort out your payment infrastructure before you enter a new market, not after. I see the same pattern again and again. A business expands into a new country and wins customers. Then, 3 months later, it finds out its payment setup can’t handle the currencies, entities or local supplier relationships it now needs. By then, you’re rebuilding under pressure, with live bookings depending on it.
The businesses scaling well in 2026 treat payments as part of their market-entry plan, alongside legal, tax and local partnerships. They don’t leave it as something to patch once growth has outrun it. Ask the unglamorous question early: can our payment setup support where we’re going? It’s far cheaper to answer that before you commit to a market than after.
That’s a big part of why we’ve built Pax2Pay around multi-currency accounts and local payouts. That question already has an answer, whichever market you move into next.
What makes a travel payments platform different?
In Pax2Pay’s 2025 survey of 200 UK travel organisations, respondents named Pax2Pay among the top 3 travel payment platforms they use. That raises a fair question: what separates a payments platform built for travel from a generic one? For us, it comes down to three things.
First, the card connects straight to your booking system. It funds itself in the right currency when the payment is authorised, not before.
Second, acceptance matters as much as rebates. That’s why we help you choose the right BIN or payment rail for each supplier.
Third, reconciliation. 49% of respondents told us automation would decide their next payment technology choice. That’s why we built the new Payments Room and Payments API, which give finance teams the exact booking data they need. All of it sits within Paxport Group and is built specifically for travel business.
Glossary
- BIN (Bank Identification Number): the first digits of a card number, which identify who issued the card and what type it is.
- Chargeback: a forced reversal of a card payment, started by the cardholder’s bank.
- Debit at authorisation: money is only taken from your account balance when a card transaction is authorised, and only for the exact amount, rather than being loaded onto the card in advance.
- Friendly fraud: when a genuine customer disputes a valid charge after the fact.
- FX markup: the margin a bank or provider adds on top of the interbank exchange rate.
- KYC (Know Your Customer): the identity and compliance checks a payments provider runs before opening an account.
- PNR (Passenger Name Record): the booking reference for a specific itinerary.
- Reconciliation: matching payment records against booking and accounting data to check they agree.
- Virtual card: a card number created for a specific transaction or supplier, with its own spending limit. It can be single-use or multi-use.
Sources
[1] Bank for International Settlements, “Cross-border payments — a catalyst for global integration and growth” (2025) – https://www.bis.org/speeches/sp251127a.pdf
[2] CFO.com, “How long is too long to reconcile the general ledger?” — citing APQC, a nonprofit benchmarking research organisation — https://www.cfo.com/news/how-long-is-too-long-to-reconcile-the-general-ledger-metric-of-the-month-accounting-strategy/725696/
[3] LexisNexis Risk Solutions, “Travel and Hospitality Fraud Patterns” — https://risk.lexisnexis.com/global/en/insights-resources/article/travel-and-hospitality-fraud-patterns
[4] Visa, “Friendly fraud explained: prevention and solutions” (2026), citing the 2025 Global eCommerce Payments & Fraud Report. https://corporate.visa.com/en/solutions/visa-protect/insights/friendly-fraud.html
With thanks to Pax2Pay
