Voice of the Industry

Travel industry insights: payment challenges, trends, and regulatory frameworks

Wednesday 27 March 2024 10:02 CET | Editor: Diana Lupuleac | Voice of the industry

Eric Drésin, Secretary General at ECTAA, discusses the payment challenges, trends, and regulatory frameworks impacting travel agents and tour operators. 


Acknowledging the complex nature of the travel ecosystem, it is evident that numerous stakeholders play pivotal roles in service distribution. It is therefore imperative that payment integration operates effectively to mitigate any additional layers of complexity within this ecosystem. Moreover, to maintain competitiveness, travel intermediaries must also prioritise delivering a smooth checkout experience and meeting customers’ increasing expectations. In this context, payments play a crucial role in customer satisfaction.

However, in the domain of payment processing, travel agents and tour operators encounter various challenges, requiring astute navigation and strategic deliberation. From the imperative of facilitating optimised transactions to the exigency of accommodating diverse payment methods, they face a myriad of hurdles. Regulatory changes and technological advancements further shape the payment landscape.

Above all, travel agents and tour operators have to ensure an optimised payment experience by offering customers an efficient transaction process from start to finish, without interruptions or delays. While for the average traveller embarking on a journey outside their own country means first and foremost changing their environment, travel agents try to avoid spoiling the customers’ expectations by hiding currency conversion issues. Ultimately, this adds costs and complexity to payment processing. 

In parallel, in recent years, the travel industry proved to be one of the most targeted industries for cybercriminals. Handling sensitive customer data during payment processing requires stringent security measures to protect against data breaches and ensure compliance with data protection regulations. Implementing robust fraud prevention measures without hindering the booking experience is essential.

Last but not least, travel agents and tour operators must adhere to various regulations and standards related to payment processing, such as PCI-DSS (Payment Card Industry Data Security Standard) compliance. Similarly, Strong Customer Authentication (SCA), mandated under the Payment Services Directive 2 (PSD2), added an extra layer of security by requiring customers to authenticate their identity for certain transactions. However, this can cause delays, impacting the payment process and customer satisfaction.

Furthermore, travel agents and tour operators often find themselves in a precarious position as the Merchant of Record. As the primary point of contact for consumers, they bear the responsibility of managing refunds and resolving disputes. Simultaneously, they must fulfil their obligations towards business partners. This dual role necessitates careful navigation to ensure business sustainability and customer trust.

The role of alternative payment methods (APMs)

Several paytech trends are rapidly becoming integral to travel experiences. From debit/credit cards and Open Banking to digital wallets, from Buy Now, Pay Later (BNPL) to digital currencies, some of these trends are already widely used, reshaping the payment experiences of travellers, and resolving the industry’s biggest pain points. These APMs offer a glimpse of innovation in the travel industry's payment landscape. 

While cryptocurrencies have yet to gain significant traction, digital wallets are steadily rising in popularity. Digital wallets provide a more flexible and cost-effective solution, catering to evolving consumer preferences. Their streamlined functionality and widespread acceptance make them an appealing choice for both travellers and service providers.

Managing this array of APMs while ensuring security and convenience is a challenge, considering that all these payment options have to be compatible with booking and reservation systems to provide a smooth end-to-end experience for customers.

The impact of the COVID-19 pandemic on payment behaviours

The COVID-19 pandemic has brought about seismic shifts in payment behaviours within the travel industry. With widespread disruptions and cancellations, the prevalence of credit chargebacks surged. Customers sought refunds and guarantees, prompting credit card companies to reassess their policies. This heightened financial scrutiny not only impacted B2C transactions but also imposed stricter requirements in B2B dealings, particularly with airlines and Global Distribution Systems (GDS).

Moreover, the pandemic accelerated existing trends, such as the digitisation of payments. As travellers sought contactless and secure payment options, digital wallets gained further momentum. This shift reflects a broader trend towards cashless transactions and underscores the importance of an adaptable payment infrastructure in the face of unforeseen challenges.

Since the pandemic and the subsequent crisis which modified the rules of distribution of services, travel intermediaries have had to revise their payment strategy both with the suppliers and with customers, and prioritise profit and risk management above all else. Considering the challenges travel agents have had to face due to the unprecedented volume of refunds their suppliers had to process, they need to keep financial viability as the bottom line for any commercial agreements.

Emerging regulatory challenges and opportunities

In parallel, regulatory frameworks play a pivotal role in shaping the trajectory of the travel industry's payment landscape. The European Commission's ongoing revisions to legislation, such as the Mobility Package and the Package Travel Directive, have profound implications for B2C transactions. These revisions aim to enhance consumer protection and streamline the purchasing process, signalling a potential paradigm shift in how travellers engage with travel products.

Additionally, the impending revision of the Payment Services Directive (PSD3) holds significant implications for payment processing. Extending SCA requirements to currently exempt transactions, such as Merchant of Record transactions, represents a notable development. This underscores the need for travel agents and tour operators to stay abreast of regulatory changes and adapt their payment strategies accordingly.


In conclusion, navigating the complex landscape of payment integration within the travel industry demands careful attention to a multitude of factors. From the imperative of optimised transactions to the evolving preferences of consumers, travel agents and tour operators must continually adapt to meet the demands of both their customers and regulatory bodies. The emergence of APMs, such as digital wallets, presents both opportunities and challenges, highlighting the need for flexible and secure payment solutions. Moreover, the COVID-19 pandemic has accelerated the shift towards digital payments and underscored the importance of an adaptable payment infrastructure in times of crisis. As regulatory frameworks evolve, travel intermediaries must remain vigilant and proactive in ensuring compliance while also seizing opportunities for innovation. By prioritising customer satisfaction, financial viability, and regulatory adherence, travel agents and tour operators can navigate the complexities of the payment landscape and sustainably drive their businesses forward in an ever-changing industry.

About Eric Drésin

Eric Drésin has been serving as the Secretary General of ECTAA since 2019. Backed by a dedicated team and the expertise of member organisations, his mission is to amplify the voice of travel agents and tour operators in their interactions with European institutions and international organisations, and foster collaborations with stakeholders and partners. During the COVID-19 pandemic, he worked to secure support from European institutions for travel intermediaries. Today, he aims to develop a resilient and sustainable travel industry in Europe.


ECTAA is the European umbrella organisation of travel agents and tour operators across Europe. Its members are the national associations of 26 member states of the EU, as well as Israel, Switzerland, Norway, Ukraine, and the UK. ECTAA’s mission is to drive growth and competitiveness in the European travel industry by working with members to inform and shape the debate in European institutions and industry bodies. ECTAA represents some 80,000 travel agents and tour operators which sell transport, accommodation, leisure, and other tourism services as well as combined products to leisure and business customers. 

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Keywords: travel payments, payments , regulation, digital wallet, PSD3, Merchant of Record, pandemic, BNPL, Open Banking, digital currency, PSD2, SCA, PCI compliance, PCI DSS, payment processing, chargebacks, digitalisation
Categories: Payments & Commerce
Companies: ECTAA
Countries: Europe
This article is part of category

Payments & Commerce


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