How the MENA conflict is reshaping travel payments

The Middle East stands at the centre of global air connectivity. According to statistics, the region accounts for 5% of global international arrivals and 14% of the global transit traffic. Since February 28, 2026, this corridor has been under significant strain. Flights from the region have dropped 59% against pre-conflict levels, airlines have rerouted or suspended long-haul operations, and travellers have abandoned holiday plans in the face of the conflict. The situation is made even more complicated by the fact that the Russian airspace has been closed since 2022, effectively narrowing down rerouting options.

The economic impact of the situation is notable. The WTTC estimates that the conflict is costing the travel sector in the Middle East approximately USD 600 million per day, while the Oxford Economics puts the full-year loss at between USD 34-56 billion in visitor spend and a drop of 11-27% yoy in inbound arrivals. Fuel price is another element that adds to the complexity. According to IATA, as of March 2026, jet fuel price rose 103% month-on-month.

For travel payments, the fallout is both operational and structural, touching traveller behaviour, authorisation rates, chargebacks, FX exposure, and risk.

In March 2026, The Paypers reached out to several experts to ask them a series of questions on the impact of the MENA conflict on travel payments. The resulting roundtable brings together specialists across payments, FX, and fraud and risk to examine what this means for the sector.

Beyond the headlines, what are the concrete effects of the MENA situation on travel payment flows?

Ray Shinzawa, Managing Director, JCB Europe: ‘Industry analysis indicates that roughly one third of Asia–Europe passenger flows typically transit through Middle Eastern hub airports, making the corridor particularly exposed to recent Iran-related airspace restrictions and operational disruptions.

The current MENA situation is having tangible effects on Asia–Europe travel and payment flows. The Strait of Hormuz, for example, carries roughly 20% of global oil supply, meaning any credible disruption risk feeds quickly into higher crude prices and, in turn, higher jet fuel costs. At baseline, fuel already represents around a quarter of airline operating expenses, so price shocks are transmitted rapidly into airfares and fuel surcharges. For long-haul routes linking Asia and Europe – many of which depend on Middle Eastern airspace – this creates persistent upward pressure on the cost of travel. At the same time, flight suspensions, cancellations, and rerouting have prompted multiple carriers to raise ticket prices as capacity tightens.

In price-sensitive Asian outbound markets, including Japan, South Korea, and China, even moderate fare increases can account for a meaningful share of total trip budgets, shaping both travel choices and spending patterns. As a result, physical travel demand may soften under sustained cost pressure. At the same time, cross-border spending may be redirected toward ecommerce and mobile commerce, with European goods purchased remotely and shipped to Asia. For merchants, this highlights that reducing payment friction is increasingly less about in-store acceptance alone, and more about ensuring reliable, trusted online and mobile payment experiences across borders.’

Airfares are spiking and currencies are volatile. What does that mean for authorisation rates and FX exposure for travel merchants?

Maarten Rooijers, founder of Payments Taking Off: ‘Authorisation rates can decline because of higher ticket prices, which may lead to insufficient funds for cardholders, especially noticeable for debit card payments, but the overall impact will not be huge. 

The FX impact will be much more considerable, especially for airlines that are short on USD. Airlines may find alternative destinations instead of flying to the MEA. In the Middle East, most currencies are linked or even pegged to the USD. When shifting flight capacity to Asia, Africa, or LATAM, this will lead to different currency cashflows. Less USD-linked currencies means that the risk of a rising USD, which is already the case, will be higher. Airlines have to manage that and try to expedite transfers to minimise depreciation or even devaluation. Alternatively, airlines could actively hedge more to minimise currency fluctuations. This will come on top of the already high risk from increased fuel prices and hedging policies in that area.’

How is the situation impacting chargeback volumes in travel payments, and who is bearing the cost?

Will Plummer, CEO, Repayd.com: ‘The situation in MENA is a clear reminder of how quickly geopolitical disruption translates into financial exposure across the travel payments ecosystem. When travel is interrupted, cancelled, or rerouted at scale, chargeback volumes inevitably rise.

What we are seeing is not simply an increase in disputes, but a reallocation of financial liability. In practice, the burden is falling disproportionately on merchants and the acquiring side, despite the root cause sitting entirely outside of their control.

The more critical point is the long-term consequence of that imbalance. Sustained exposure at this level places pressure on acquirers’ appetite for the sector. History has shown that when risk becomes misaligned, capacity contracts.

If that trend repeats, merchants will face a more constrained acquiring landscape, tighter underwriting, higher rolling reserves, and reduced optionality.

The real cost, therefore, is not just immediate financial loss, but a gradual erosion of access, flexibility, and growth across the travel payments ecosystem.’

What fraud patterns are emerging for travel merchants as a result?

Livia Vite, CEO of actuary aero: ‘We are seeing a clear shift in behaviour driven by uncertainty. Cancellation activity has increased significantly, which is expected given airline schedule changes, but notably, this is often happening just two to three weeks before departure. Airlines are understandably waiting for more clarity before making operational decisions, but this compressed timeframe is prompting more reactive behaviour from consumers.

As a result, one of the most prominent patterns is a surge in chargebacks under “extraordinary circumstances”. Rather than waiting for standard refund processes, some customers are going directly to their card issuer to dispute transactions, using the disruption as justification. This is placing additional pressure on merchants, particularly those already managing high volumes of cancellations.

We are also seeing instances of what is commonly referred to as “double-dipping”. In some cases, consumers are both requesting refunds from the merchant and initiating a chargeback through their card provider. This is not always intentional, but it does create a complex reconciliation challenge for travel businesses and increases financial exposure at a time when operational visibility is already limited.’

How is the conflict changing risk exposure for travel merchants, and what does that mean for their acquirer and PSP relationships?

Sami Doyle, CEO of TMUManagement.com: ‘The MENA conflict is creating a risk dynamic that the travel payments ecosystem has not meaningfully stress-tested before. Chargeback exposure for delayed delivery merchants (airlines, tour operators, hotel groups) has historically been modelled against demand shocks that are localised and short-lived. Geopolitical instability of this scale and duration produces something different: correlated cancellation events across multiple carriers and markets simultaneously, with refund timelines that extend well beyond standard chargeback windows.

What makes this particularly complex for acquirers and PSPs is that the liability doesn't crystallise immediately. Bookings made months in advance create a rolling exposure that sits quietly on the balance sheet until disruption forces it to surface. The real question acquirers should be asking now is not what their current chargeback rate looks like, it's what their forward exposure looks like across a DDM portfolio if MENA instability persists or escalates through the peak summer booking cycle.’

How is this affecting cross-border payment flows for travel merchants, and where is the friction the greatest?

Livia Vite from actuary.aero notes that, from a card processing perspective, cross-border payments themselves are not the primary issue. The global card schemes operate under largely consistent rules, meaning transactions can continue to flow across borders with relative stability, despite regional disruption.

However, Will Plummer, CEO of Repayd, highlights that the real friction sits around the payments rather than within the transaction itself. Increased cancellations, compressed timelines, and higher refund volumes are putting pressure on settlement, liquidity, and reconciliation, particularly where multiple currencies are involved.

The greatest challenges are therefore being felt in managing FX exposure, aligning settlement timing across markets, and controlling the cost of cross-border transactions during a period of heightened volatility.

Conclusions

The MENA situation is a reminder that the payment infrastructure is only as stable as the world it operates in. The experts in this roundtable have mapped out the immediate consequences. Merchants are absorbing chargebacks for disruptions outside their control. Airlines are managing FX exposure on routes that have been fundamentally redrawn. Fraud is adapting faster than refund processes can keep up. While the impact on payments is still being written, its final scale will depend on what happens in the region in the upcoming months.

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.