Travel payments in 2026: challenges, trends, and regulatory updates

The Paypers invited six payment experts to weigh in on the trends, challenges, and regulatory shifts impacting travel payments in 2026.

Even though they are global by nature, travel payments are fragmented by design. Every cross-border booking involves dealing with mismatched regulations, currency volatility, legacy infrastructures, and payment preferences that vary by market and by customer. 

To understand where the industry is heading in 2026, The Paypers reached out to payment experts across the travel ecosystem, from online travel agencies and payment service providers to industry consultants and regulatory bodies. We asked each three questions about the challenges, trends, and regulatory changes shaping travel payments in 2026. Their answers paint the picture of an industry caught between the promise of modernisation and the friction of getting there. Here’s what they had to say:

What challenges are travel payments currently facing?

The experts we spoke with highlight several challenges across the industry: fragmented payment options, outdated infrastructures, cross-border friction, and the operational hurdles associated with managing risk in a sector known for high transaction values and long lead times. 

Eric Drésin, Secretary General of ECTAA, points to the existence of a ‘paradox of choice’: ‘Massively pushed by the pandemic, travel companies must overthink or set up payment strategies. Then there is the ‘paradox of choice’ created by an increasingly fragmented landscape. Intermediaries must navigate a diverse array of options – from Virtual Credit Cards (VCCs) to Open Banking solutions. While this diversity promises efficiency, it complicates the selection process: agencies struggle to identify which method best balances transaction costs, cash flow protection, and supplier acceptance. It is necessary that intermediaries and suppliers hold discussions on acceptance of suitable B2B forms of payment, but not always easy. Also, for the 98% of our members who are SMEs, orchestrating these complex payment flows while maintaining liquidity remains a significant operational burden’.

The infrastructure making travel payments possible is also showing its age. Thierry Stucker, IATA’s Director for Industry Payment Programmes, explains: ‘The current card payment message standards are outdated and date back to 1987 and have not evolved. Over time, industry participants have deviated from these standards, requiring now translation layers that create customer payment friction and inefficiencies. 

Corporate travel payments still rely on consumer-style processes developed in the 1980s, leading to manual expense reporting and higher costs instead of automated B2B procurement flows. Additionally, introducing new consumer alternative payment methods (APMs) is bespoke, costly, and with a long implementation typically in the range of 9-12 months. This limits airlines’ ability to respond quickly to customer preferences or cost-saving opportunities’.

Paul van Alfen, Travel Payments Strategist at Up in the Air, echoes the operational strain: ‘When it comes to acceptance, next to ongoing challenges related to hygiene factors like card scheme compliance and data security, travel merchants will have to continue to focus on cost control, credit risk, conversion, network tokenization, and fraud management. 

With the rollout of payment orchestration solutions ongoing, keeping the back office in sync and enabling it to deal with the end-to-end reconciliation of a growing number of connected acquirers / (B2B) payment providers will become the next priority.’

Sam Argyle, Managing Director of Alternative Airlines, explains the reality of operating globally: ‘Travel is global, meaning payments often cross multiple borders. Each market has its own regulatory requirements, consumer protection rules, and preferred payment methods. Travel businesses in this space, such as Alternative Airlines, must navigate specialised frameworks, data protection laws, and strong customer authentication requirements, all of which impact day-to-day operations. To further complicate matters, foreign-exchange volatility affects costs and revenues, causing unpredictability when payments occur in different currencies. 

In addition to this, the travel sector is widely known as high risk due to large transaction values, long lead times between booking and travel, and frequent changes or cancellations. These factors mean that businesses like Alternative Airlines are exposed to increased risk of fraud and disputes. Chargebacks can arise months after the original transaction, contributing to administrative and sometimes financial strain. As a result of this challenge, it’s important to balance robust fraud-prevention measures whilst maintaining a smooth payment experience for our customers’.

Jacqueline Ulrich, SVP Global Travel Partners & Product Strategy at Nuvei, showcases the cost of payment failures: ‘Travel payments sit at the most fragile point of the customer journey. Bookings are high-value, time-sensitive, and often made under pressure. Our research shows 17% of travellers have experienced a card decline when booking online, and nearly one in five are lost when that happens, either abandoning the purchase or booking elsewhere. Localisation remains a persistent issue. Around 60% would abandon if their preferred payment method isn’t available, while 92% expect prices in their own currency. Together, these factors make payment performance an indicator of whether a booking is completed or lost at the final step.’

Greg Toussaint, Director at Edgar, Dunn & Company, points to the effects of geopolitical shocks on the industry and adds that preparing for agentic commerce is now a near-term challenge, not a future consideration: ‘Travel is an industry that is continuing growing and has by now fully overcome the Covid period. However, it is still dependent on geopolitical news and, depending on latest developments, it could be impacted by political announcements. From a payment’s perspective, this means it is important to monitor risks carefully, strengthen the payments infrastructure, and automate refunds and chargebacks. 

The travel industry also needs to get ready for agentic commerce, as we believe at Edgar, Dunn & Company it will become prevalent in the near future. Developing relevant payment journeys for agentic commerce, including consumer consent and mitigating potential fraud risks, will be key challenges for 2026.’

What major trends will shape travel payments in 2026?

When it comes to what’s next, the experts converge on a few common themes: infrastructure modernisation, the differences between B2B and B2C innovation, and the arrival of AI and agentic commerce. 

Thierry Stucker, IATA’s Director for Industry Payment Programmes, is direct about what the ecosystem needs and what developments are worth watching: ‘The payment ecosystem needs to work towards an accelerated implementation of the modern ISO 20022 nexo standard, which not only modernises card payments, but will also entail modern payment instruments like Instant Bank transfers and potentially more over time.

More momentum is needed in corporate travel to rethink the entire purchase process to align it with B2B procurement processes found in many other industries.

The shift towards instant payments, digital wallets, and central banks launching projects that will drive innovation, such as the digital yuan in China, Pix in Brazil, and the European Central Bank’s digital Euro project would also be developments to watch’.

Paul van Alfen, Travel Payments Strategist at Up in the Air, points to agentic commerce for B2C and stablecoins for B2B as defining trends and argues both have the power to make a difference: ‘The major buzzwords in travel fintech are agentic commerce for B2C, with solutions for hotel bookings in the lead, and stablecoins for B2B use cases. With “big tech” heavily committed and major investments locked in, both trends will have a good chance of becoming reality (and won’t turn out to be a ‘hype’ like the metaverse a couple of years ago).

From a product perspective, A2A (e.g., Revolut Pay and potentially Wero in Europe), BNPL, mobile wallets, and split payments will remain top of mind when it comes to conversion optimisation. Cryptocurrencies will remain an investment/speculation vehicle and won’t be embraced widely as a form of payment via wallets but might make some inroads when connected to debit cards issued by Visa and Mastercard’.

The B2B and B2C divide comes up repeatedly in the answers. Eric Drésin, Secretary General of ECTAA, emphasises that business payments are moving slower and that resilience matters as much as innovation: ‘There are different speeds of development for B2C and B2B payment with B2B moving slower. 

In B2C wallets, crypto and more is already present. B2B payment innovation in 2026 might be well defined by the acceleration of “Modern Airline Retailing” and the transition to “Offers & Orders”. With first carriers working with orders, dynamic, real-time settlement models evolve. 

For intermediaries, robust and resilient B2B payment solutions that balance security, cash flow, cost, and revenue opportunities will be key. We see an increasing understanding in the industry that B2B forms of payment must work for all parties involved and that collaboration is beneficial in that sense.

Especially given the global volatility, there is a focus on secure, resilient payment stacks that work for both legacy infrastructure and new retailing standards without disrupting service.’

Greg Toussaint, Director at Edgar, Dunn & Company, breaks down the two segments further: ‘When it comes to travel payments, it is relevant to differentiate between B2C and B2B payments:

• Regarding B2C payments, travel providers such as airlines and hotels, and travel intermediaries such as OTAs will need to increasingly meet the needs of consumers. This includes offering specific payment methods such as domestic cards, local/regional wallets, and specific account-to-account/bank transfers. It also includes offering relevant customer journeys to provide more flexibility regarding booking (e.g., hold the booking and pay later), insurances, and payments with BNPL options.
• Regarding B2B payments, two trends are emerging. On one hand, virtual cards continue to be increasingly used, as detailed in another article in The Paypers. From our experience at Edgar, Dunn & Company, it is important for travel providers to find the balance and identify when it makes sense to accept virtual cards. On the other hand, some actors in the industry believe account-to-account payments could become more prevalent, especially with the development of real-time payment infrastructure.’

Jacqueline Ulrich, SVP Global Travel Partners & Product Strategy at Nuvei, reinforces the localisation point and adds that what happens after a card decline is now getting as much attention as preventing one: ‘Payment expectations are becoming increasingly local. Travelers now expect booking flows to reflect how they pay at home, whether through local wallets, account-to-account payments, or regional schemes. At the same time, travel companies are paying closer attention to what happens after an initial decline. Multi-acquirer strategies, payment orchestration, smart routing, and adaptive retries are gaining importance as declines often redirect demand rather than stopping it. Flexibility is also becoming more visible. Three-quarters of travellers say they prefer split payments such as combining cards, miles, or alternative methods, yet many platforms still struggle to support this seamlessly.’

Sam Argyle, Managing Director of Alternative Airlines, highlights AI’s role in crafting personalised customer experiences and operational efficiency: ‘One of the key trends set to shape travel payments in 2026 is the rise of AI-driven personalisation and automation.

AI is expected to play a growing role in delivering more tailored booking and payment experiences, using traveller preferences, budgets, and behaviour to support smarter itinerary planning and pricing decisions. This will help reduce friction at checkout while making travel options feel more relevant and intuitive for customers.

In parallel, AI will increasingly streamline expense management and payment processes. Automated transaction categorisation and reconciliation have the potential to reduce reliance on manual expense reporting, improving efficiency and accuracy for both travellers and finance teams. As a result, travel payments will become more integrated, data-driven, and operationally efficient across the industry’.

Which regulatory changes are likely to have a big impact on travel payments in 2026?

In 2026, regulatory change looms large, particularly in Europe, where several initiatives could reshape how travel payments work. 

Sam Argyle, Managing Director of Alternative Airlines, highlights the EU Instant Payments Regulation alongside broader global compliance pressures: ‘Two regulatory developments are likely to have a meaningful impact on travel payments in 2026. The EU Instant Payments Regulation will push euro payments towards real-time, 24/7 processing, speeding up settlement for bookings, refunds, and supplier payments while also raising expectations around fraud checks and verification. Alongside this, there will be ongoing global compliance pressures. Tighter requirements around anti-money laundering, operational resilience, and cross-border transparency will add complexity for travel businesses operating internationally’. 

Multiple payments experts also flag the revision of the Payments Service Direction (PSD3) and the Payment Service Regulation (PSR) as critical. Eric Drésin, Secretary General of ECTAA, warns of the stakes: ‘The revision of the Payment Services Directive (PSD3) and Payment Services Regulation (PSR) is critical. The potential narrowing of the “Commercial Agent Exclusion” is particularly alarming for travel intermediaries. If this exemption is not clearly defined to reflect the reality of travel distribution – where agents negotiate on behalf of travellers or suppliers – thousands of agencies could be forced to seek costly licensure as payment institutions. Associations like ECTAA are actively campaigning to ensure these rules do not disproportionately burden the sector.’

Greg Toussaint, Director at Edgar, Dunn & Company, also stresses the importance of understanding PSD3’s implications before it takes effect, and argues that regulation needs to catch up with agentic commerce: ‘One of the most important trend in the travel sector is the development of agentic commerce and there are many initiatives from different actors, including travel intermediaries, issuers, acquirers and payment schemes. Industry payment regulations need to adapt to agentic commerce to enable smooth and secured customer journeys.

The 3rd Payment Services Directives (PSD3) is expected to be discussed further and finalised in 2026. It is highly relevant for actors in travel payments to understand the different implications (e.g., customer protection, dispute resolution) before it comes into force in a near future.’

Jacqueline Ulrich, SVP Global Travel Partners & Product Strategy at Nuvei, expands on the European picture and adds the UK dimension: ‘In Europe, the Instant Payments Regulation is expected to accelerate the adoption of real-time bank transfers by requiring broader availability, price parity, and safeguards such as beneficiary verification. This will influence how “pay by bank” options are designed at checkout. The EU’s forthcoming PSD3 and Payment Services Regulation will further tighten rules around fraud prevention, authentication, and liability. In the UK, mandatory reimbursement for authorised push payment scams continues to shape how providers manage risk and consumer protection, particularly for high-value travel transactions.’

Thierry Stucker, IATA’s Director for Industry Payment Programmes, highlights the PSR’s implications for surcharging and fee transparency, alongside CBDC developments: ‘Two come to mind. The first is the outcome of the European Union Trilogue in November 2025 on the Payment Service Regulation (PSR) and its possible implications on payment fees transparency, rights for merchants to surcharge non-regulated payment instruments. The second is the legislative work that will enable central bank digital currencies.’

Paul van Alfen, Travel Payments Strategist at Up in the Air, adds that ISO 20022 adoption and geopolitical disruptions are also on the radar: ‘Historically, regulators have struggled with the complex use cases in the travel industry, especially in the indirect channel, where travel intermediaries are involved. Upcoming EU regulations for PSD3 and the Package Travel Directive will need to be followed closely to anticipate the possible impact on business models and day-to-day processes.

The push for adoption of the ISO 20022 standard for payment data exchange will start impacting card acquirers and gateway/ orchestration providers.

Next to regulatory changes, also the evolving (geo)political landscape and accompanying disruptions will need to be considered, as it will reduce trust in the travel cross-border ‘deferred delivery’ payments value chain and will cause operational impact when, e.g. suddenly individual markets are closed’.

What it all adds up to

These perspectives from different industry stakeholders offer a grounded perspective of where travel payments are heading in 2026. The challenges highlighted by the experts are not new: fragmentation, legacy infrastructures, cross-border complexity, and risk exposure have defined the sector for years. What is somewhat changing is the need to address them. Regulatory changes are coming, and the gap between B2C and B2B innovation is widening. 

For people working in travel payments, the year ahead might be less about betting on the next big thing and more about getting the fundamentals right: preparing for regulatory updates, modernising infrastructures, and building payment operations that can absorb volatility without breaking. 

This article is part of The Paypers’ Travel Series, which includes contributions on topics spanning emerging trends in travel payments, fraud and security challenges, regulatory and tax impacts, risk management and forex, as well as sustainability in the travel industry. For a complete overview of all the contributions featured, click here.